For a Visitor - Does High Variance really matter?

[jaydavidson118]

--- In vpFREE@yahoogroups.com, "nightoftheiguana2000"
<nightoftheiguana2000@y...> wrote:

the formula cited below, credited to Evgeny Sorokin but found by
others including Jazbo Burns, does not use variance
it is my understanding that it is an exact solution but i have not
attempted to follow the derivation
it is possible the derivation is online somewhere

There is no EXACT solution, otherwise it wouldn't be gambling. Any
ror calc. has to use variance parameters in its calculation. All
calculation that I have seen assume that the Normal distribution is
the correct distribution, which it is not. It is an approximation,
that works well for calulations near the median of the distribution,
but is of questionable value at the extremes of the distribution,
which is where ror calcs are made..

for full pay deuces wild the R(1) number is 0.999346831403995 and
represents the risk of losing a bankroll of one bet,

So, according to the above statement you are saying that you will
lose ovef 99% of all hands played at full pay deuces wild! I also
think the number of significant digits is off quite a bit above, and
only serves to be misleading about the accuracy of the
calculation...which gets to the point of my post.

[Steve_Jacobs]

--- In vpFREE@yahoogroups.com, "nightoftheiguana2000"

<nightoftheiguana2000@y...> wrote:
> the formula cited below, credited to Evgeny Sorokin but found by
> others including Jazbo Burns, does not use variance
> it is my understanding that it is an exact solution but i have not
> attempted to follow the derivation
> it is possible the derivation is online somewhere

There is no EXACT solution, otherwise it wouldn't be gambling.

Here, "exact solution" means the value computed for risk-of-ruin
is the exact probability of going broke rather than playing indefinitely.
This method does in fact produce an exact solution. Many other
formulae for risk-of-ruin employ approximations (usually based on
variance).

Any ror calc. has to use variance parameters in its calculation.

No, that is not true. Using variance to compute RoR gives an
approximation.

> for full pay deuces wild the R(1) number is 0.999346831403995 and
> represents the risk of losing a bankroll of one bet,

So, according to the above statement you are saying that you will
lose ovef 99% of all hands played at full pay deuces wild!

No, that isn't what that means. It means if a billion different players
start with a single unit bankroll, and each play until they go broke
or grow filthy rich, eventually 999,346,831 of the starting players
will end up broke, having suffered a net loss of one unit.

I also
think the number of significant digits is off quite a bit above, and
only serves to be misleading about the accuracy of the
calculation...which gets to the point of my post.

I haven't verified that particular number, but the exact RoR value
can theoretically be computed to as many digits of accuracy as
you like. Once again, the so-called "Sorokin Formula" (which
actually was originally developed by Laplace, De Moirve,
Lagrange, and Bernoulli) is an exact calculation. The resulting
RoR value can be used to compute many other probabilities,
such as the probability of starting with a B unit bankroll and
surviving until the bankroll grows to G units (or going broke).

In a similar fashion, there are many other statistical measures
which can be computed exactly without making any use of
variance. Most any formula that is based on variance is
likely to be an approximation, unless it was variance itself
that you want to compute.

···

On Thursday 06 January 2005 10:16 pm, jaydavidson118 wrote:

[nightoftheiguana2000]

--- In vpFREE@yahoogroups.com, "jaydavidson118" <jaydavidson118@y...>
wrote:

There is no EXACT solution, otherwise it wouldn't be gambling.

from:
http://www.wizardofodds.com/games/videopoker/tables/deuceswild.html
here are the EXACT results for full pay deuces wild using max-er
strategy:

rf_______440202756
4d______4060462824
wrf____35796957696
5k_____63818309856
sf_____82122481680
4k___1294427430576
fh____423165297240
fl____330506232804
st___1127512239276
3k___5671888316712
zip_10899492585780
sum_19933230517200

from this data you can calculate the EXACT er, variance and R(1)
limited by the precision of your calculator

i get:
er=1.007619612039
variance=25.8346180524
R(1)=0.999346832571955