Day 56 The Countdown Continues...
What is expected value?
The expected value (EV) or expectation of a wager is how much you will win in the "long run" by making that wager.
For example, this situation comes up often in Texas hold'em: a player has four hearts on the turn, and needs to hit a heart on the next and final card to make a flush. He is absolutely certain he will win if he hits the flush and in so doing the board does not pair, because the board allows no possibility for a full house or better hand, and his flush will be the nut flush. Even if the board pairs, he has a good chance of winning, so he need not worry about other hands that much. The probability of catching the heart is about one in five. Therefore, he can expect to lose most of the time. However, the idea of continuing cannot be dismissed out of hand unless we know what his expectation is.
If it will cost $5 to call a bet and the pot, including other bets and calls, is $50, our player actually has a very positive expectation and should pay to see the next card. The chance of hitting his hand is only one in five, the pot is ten times the bet size. The player expects to win on average two dollars for every dollar invested every time this situation occurs.
Expected Value: A Lousy Concept for Tournaments
The more I play tournaments the more I learn that expected value is a lousy concept for tournaments. Here are some of my reasons why:
1. It is based on the "long run."
Cash games are in the long run. A tournament is not the long run. It is one moment in time.
2. It is based on the value of the chips being equal.
In cash games, a buck is a buck. In a tournament, the value of your chips change based on the blinds. As the blinds increase, it is said your chips are "worth" less.
3. Tournaments provide more opportunities to accumulate chips, so why not play when you have the upper hand.
I recall Chip Reese's story on how he lost a big pot against a poor player even though he had a slight edge. He said that sometimes the mathematically correct play is not the right play. And I think this is what happens when you adhere to expected value in a poker tournament.
My new tournament poker concept: Unexpected Value
What is unexpected value? Unexpected value is making a fold even though you have positive expected value, since you know you will get more value out of a better poker situation.
I will give you an example from a MTT I was playing in last night. It was down to 18 players. There were 9 players at my table and I was on the button. A tight player raised 3x's the big blind. It was folded to me. I found pocket Jacks. A call made no sense since it committed half my stack. It was a situation where if I moved all-in, the raiser would call me since he had committed about 40% of his chip stack.
Since I knew my opponent was tight, he was pot committed, and 65% of the time the flop alone will have one card higher than my Jack, I made the unusual play. I folded.
It ended up being the right thing to do since I was able to take my low chip stack and finish 4th.
What do you think?
Please let me know your thoughts on unexpected value in poker:) Thanks!