vpFREE2 Forums

VP rookie: Payout vs. Variance debate

#1

Hi all, just recently found your nice group here.

I'm more experienced and studied at table poker than video and just
began spending more time seriously studying video strategy. The only
software I have is Masque Strategy Pro (Lenny Fromme) and the
strategy tables are based purely off payout. I haven't had a chance
to sit down with any of the apparently good books on the subject out
there.

I have already begun to depart from a pure payout strategy where a
slight payout decrease offers a corresponding large variance
decrease in most of the JoB games. I'm trying to be realistic in
that I don't have an infinite bankroll and hence variance is a
significant factor in my strategy. An example: (8-8-8 All American)
I'll gladly play the .61 return KQJ over the .62 return 2 cd Royal
draw for the immense reduction in variance. Good play or bad play?

If someone could reference sources of information regarding some
type of variance index in conjuntion with payout I would greatly
appreciate it. Any other feedback on variance vs. payout is very
welcome.

Thanks!

#2

You may want to check out the following vpFREE link for information...
http://members.cox.net/vpfree/Bank.htm

···

----- Original Message -----
  From: poker_pagan
  To: vpFREE@yahoogroups.com
  Sent: Sunday, December 26, 2004 1:37 PM
  Subject: [vpFREE] VP rookie: Payout vs. Variance debate

  Hi all, just recently found your nice group here.

  I'm more experienced and studied at table poker than video and just
  began spending more time seriously studying video strategy. The only
  software I have is Masque Strategy Pro (Lenny Fromme) and the
  strategy tables are based purely off payout. I haven't had a chance
  to sit down with any of the apparently good books on the subject out
  there.

  I have already begun to depart from a pure payout strategy where a
  slight payout decrease offers a corresponding large variance
  decrease in most of the JoB games. I'm trying to be realistic in
  that I don't have an infinite bankroll and hence variance is a
  significant factor in my strategy. An example: (8-8-8 All American)
  I'll gladly play the .61 return KQJ over the .62 return 2 cd Royal
  draw for the immense reduction in variance. Good play or bad play?

  If someone could reference sources of information regarding some
  type of variance index in conjuntion with payout I would greatly
  appreciate it. Any other feedback on variance vs. payout is very
  welcome.

  Thanks!

[Non-text portions of this message have been removed]

#3

poker_pagan wrote:

I have already begun to depart from a pure payout strategy where a

slight payout decrease offers a corresponding large variance
decrease in most of the JoB games. I'm trying to be realistic in
that I don't have an infinite bankroll and hence variance is a
significant factor in my strategy.

Dear Pagan;

If you want to play around with this kind of thing you really need
to purchase Frugal Video Poker*. It allows you to alter strategies
to your heart's content and will provide you with both the return
and variance of the new strategy. It also does much, much, more than
that, but for the kinds of analysis you want to do, this is the
best. In fact, it's essential, IMHO.
*http://www.frugalgambler.biz/fvp/fvp_home.htm
Thanks,
Skip

#4

Thanks for the reference, Albert! My learning horizons just opened
dramatically.

You may want to check out the following vpFREE link for

information...

http://members.cox.net/vpfree/Bank.htm
  From: poker_pagan
  To: vpFREE@yahoogroups.com
  Sent: Sunday, December 26, 2004 1:37 PM
  Subject: [vpFREE] VP rookie: Payout vs. Variance debate

  Hi all, just recently found your nice group here.

  I'm more experienced and studied at table poker than video and

just

  began spending more time seriously studying video strategy. The

only

  software I have is Masque Strategy Pro (Lenny Fromme) and the
  strategy tables are based purely off payout. I haven't had a

chance

  to sit down with any of the apparently good books on the subject

out

  there.

  I have already begun to depart from a pure payout strategy where

a

  slight payout decrease offers a corresponding large variance
  decrease in most of the JoB games. I'm trying to be realistic in
  that I don't have an infinite bankroll and hence variance is a
  significant factor in my strategy. An example: (8-8-8 All

American)

  I'll gladly play the .61 return KQJ over the .62 return 2 cd

Royal

  draw for the immense reduction in variance. Good play or bad

play?

···

--- In vpFREE@yahoogroups.com, "Albert Pearson" <a-p@s...> wrote:

  ----- Original Message -----

  If someone could reference sources of information regarding some
  type of variance index in conjuntion with payout I would greatly
  appreciate it. Any other feedback on variance vs. payout is very
  welcome.

  Thanks!

[Non-text portions of this message have been removed]

#5

depends on your bankroll (total money you are willing to put at risk)

use Certainty Equivalence to decide
CE=EV-Variance/(2xBankroll)

KQJ:
EV=(665x0+348x1+27x1+9x3+32x8)/1081=0.61
Variance=(665x(0-0.61)^2+348x(1-0.61)^2+27x(1-0.61)^2
  +9x(3-0.61)^2+32x(8-0.61)^2)/1081=1.95

QJs(K penalty):
EV=(9967x0+4914x1+711x1+281x3+157x8+162x8+18x8+2x40
  +2x200+1x800)/16215=0.64
Variance=(9967x(0-0.64)^2+4914x(1-0.64)^2+711x(1-0.64)^2
  +281x(3-0.64)^2+157x(8-0.64)^2+162x(8-0.64)^2+18x(8-0.64)^2
  +2x(40-0.64)^2+2x(200-0.64)^2+1x(800-0.64)^2)/16215=46.02

when is CE(KQJ) > CE(QJsKpen)?
when: 0.61-1.95/2BR > 0.64-46.02/2BR
solving for BR:
BR<(46.02-1.95)/(0.64-0.61)/2< 734.5 bets

conclusion:
if your bankroll is not greater than 734.5 bets, you should not go for
the potential extra ev of QJs over KQJ

···

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

An example: (8-8-8 All American)
I'll gladly play the .61 return KQJ over the .62 return 2 cd Royal
draw for the immense reduction in variance. Good play or bad play?

#6

nightoftheiguana2000 wrote:

conclusion:
if your bankroll is not greater than 734.5 bets, you should not go
for the potential extra ev of QJs over KQJ

iggy, can I ask you to venture a very general statement?

Speaking very broadly, do you see (or expect) many situations where
if you're playing on at least a 5% ROR bankroll that a variance
reducing strategy change is warranted by similar criteria?

My expectation is not. And, unless a player is playing at an
accuracy within .02% of perfect play ER, I heartily recommend that a
player forego such stategy changes and simply focus on honing their
accuracy with "standard" ER optimal strategy.

(Setting aside any consideration/discussion that a less than fully
proficient player might pursue alternate strategies to pursue goals
other than max-ER ... Steve :wink:

- Harry

#7

But Harry, this is like trying to have your cake and eat it too. Altering
play to reduce variance *is* pursuing an alternate strategy for the sake
of something other than maximizing ER.

Using certainty equivalent to decide is roughly equivalent to using
log utility to make strategy decisions. This selects a strategy that is
less agressive than max-ER but more agressive than min-RoR. If
the player has only 5% RoR, then each wager will be smaller than
the ideal Kelly wager, and the log-optimal strategy will have fewer
deviations from max-ER play, but I am guessing that the log-optimal
strategy under these conditions is still closer to "pure" log-optimal
than it is to "pure" max-ER.

One more point: I feel that reducing variance merely for the sake
of reducing variance is misguided. Variance can be made very
small by using a strategy that intentionally minimizes the probability
of winning. It is easy to take variance reduction too far, causing
more harm than good in the process. It is better to choose a more
specific objective and use a strategy which targets the specific
objective without giving any particular consideration to variance.

···

On Monday 27 December 2004 08:27 am, Harry Porter wrote:

nightoftheiguana2000 wrote:
> conclusion:
> if your bankroll is not greater than 734.5 bets, you should not go
> for the potential extra ev of QJs over KQJ

iggy, can I ask you to venture a very general statement?

Speaking very broadly, do you see (or expect) many situations where
if you're playing on at least a 5% ROR bankroll that a variance
reducing strategy change is warranted by similar criteria?

My expectation is not. And, unless a player is playing at an
accuracy within .02% of perfect play ER, I heartily recommend that a
player forego such stategy changes and simply focus on honing their
accuracy with "standard" ER optimal strategy.

(Setting aside any consideration/discussion that a less than fully
proficient player might pursue alternate strategies to pursue goals
other than max-ER ... Steve :wink:

#8

i don't know about many, but there are some
for example the three deuce five of a kind or the aces full in double
bonus ... or changes for a sequential royal ...
also, a player may have started with a 5% ror bankroll, but might be
at a much lower level when a particular play comes around, or
conversely a much higher level, so one can modify their play based on
their current level of bankroll

--- In vpFREE@yahoogroups.com, "Harry Porter" <harry.porter@v...>
wrote:

nightoftheiguana2000 wrote:
> conclusion:
> if your bankroll is not greater than 734.5 bets, you should not

go

> for the potential extra ev of QJs over KQJ

iggy, can I ask you to venture a very general statement?

Speaking very broadly, do you see (or expect) many situations where
if you're playing on at least a 5% ROR bankroll that a variance
reducing strategy change is warranted by similar criteria?

My expectation is not. And, unless a player is playing at an
accuracy within .02% of perfect play ER, I heartily recommend that

a

···

player forego such stategy changes and simply focus on honing their
accuracy with "standard" ER optimal strategy.

(Setting aside any consideration/discussion that a less than fully
proficient player might pursue alternate strategies to pursue goals
other than max-ER ... Steve :wink:

- Harry

#9

nightoftheiguana2000 wrote:

i don't know about many, but there are some
for example the three deuce five of a kind or the aces full in
double bonus ... or changes for a sequential royal ...

I'll certainly give you the trip. deuces / 5K example. But it's a
very unusual circumstance relative to most. On one hand you're
talking about one card short of a very high payout, vs. a sure thing
paying 125 cr. This makes for a significant variance difference --
not only when the single hand is considered but also in considering
the impact on overall game variance.

In the case of deuces, when a handpay is involved for the quad,
standard advice has been to stick with the 5K. The rationale had
nothing to do with variance consideration but that if you're looking
to optimize your theo profit per hour you want to avoid the lengthy
delay of a handpay, putting you out of commission. These days, when
the 1000 win will just increase your credit meter, most advise going
for the deuces. For myself, I advise if you get a kick out of going
for the big hit, definitely shoot for quad deuces. If a sure 125 cr
floats your boat, the ER difference is modest I can't argue against
keeping the 5K ... but take a good look in the mirror and make sure
that you truly fit the image of a gambler :wink:

The second case you cite, 10/7 DB aces full, involves lesser
magnitudes on the near miss (aces at 800) and the sure thing (50).
Frankly, the game variance reduction achieved is relatively
insignificant in the scheme of things. Certainly not enough to
appreciably change game bankroll requirements, which is what you're
really after if you're going to change strategy. Bottom line, anyone
who feels inclined to hold onto a full house rather than go for the
aces in the case of 10/7 DB should closely examine if they actually
possess a sufficient bankroll to play the game at their current
denomination.

Progressives or a bonus meter on a sequential royal present unique
circumstances that I'm not addressing when I suggest that for
standard play the greater body of players should work on improving
accuracy rather than make strategy changes that typically only
modestly (many times, minorly) reduce variance. If you're determined
to make the strategy variation I advise you to have a firm grip on
the extent to which the change reduces your bankroll requirement.
All too often it's going to look like peanuts even relative to what
you typicall risk over the short run.

- Harry

#10

--- In vpFREE@yahoogroups.com, "Harry Porter" <harry.porter@v...>
wrote:

For myself, I advise if you get a kick out of going
for the big hit, definitely shoot for quad deuces. If a sure 125

cr

floats your boat, the ER difference is modest I can't argue against
keeping the 5K ... but take a good look in the mirror and make sure
that you truly fit the image of a gambler :wink:

there are many different types of gamblers, some are even winners
personally i keep the 5k, even if the peanut gallery protests
just because one is a gambler doesn't mean one has to go for the long
shot or become an action junkie

Bottom line, anyone
who feels inclined to hold onto a full house rather than go for the
aces in the case of 10/7 DB should closely examine if they actually
possess a sufficient bankroll to play the game at their current
denomination.

no one really has a sufficient bankroll (short of the sultan of
brunei) so it becomes a matter of risk of ruin
personally, i have a large bankroll and i keep the full house
then again i'm probably not the "typical" gambler, i gamble to win
and my tool of choice is math

Progressives or a bonus meter on a sequential royal present unique
circumstances that I'm not addressing when I suggest that for
standard play the greater body of players should work on improving
accuracy rather than make strategy changes that typically only
modestly (many times, minorly) reduce variance. If you're

determined

to make the strategy variation I advise you to have a firm grip on
the extent to which the change reduces your bankroll requirement.
All too often it's going to look like peanuts even relative to what
you typicall risk over the short run.

hmm, standard play?
so no cashback bonuses or special hand bonuses or special gas card
promotions ...
that doesn't sound like gambling to me , lol