pede1976 wrote: "Including the 1.5% advantage due to points we have .0306/68.07 which is bet .04495% of your bankroll. This is counter-intuitive to me. We use the same strategy on the same game except that when the royal is doubled Kelly says we should bet less of our bankroll. Why?"
The variance increased. Variance is a big problem with progressives. The Kelly system measures the world by EV/Variance (approximately), so EV gain at the expense of an even greater Variance gain is not a net gain. Under the Kelly system, you get better bankroll growth with a reduced betsize, because the variance increased.
pede1976 wrote: "If you re-add in the value when you do (rarely) hit the royal (which we will say is a standard 800) then you wind up around 99%. While still a positive game with the 2.1% you add back on, you could do a lot better."
Actually, from the measure of "cost of hitting a royal", you can't do better. You could get a higher theoretical EV, by using maxEV strategy, but it would take more time and money to grind out a reasonable portion of that theoretical EV.
pede1976 wrote: "Am I correct when I interpret this to mean that this MCR strategy is the MCR strategy for arbitrary values of the royal?"
That's correct, it's the strategy that produces the minimum cost to hit the royal. What you actually get for the royal (the payoff) has no effect on the strategy.
Posted by: nightoftheiguana2000@yahoo.com
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