Thursday, May 7, 2009

Why is it almost always most profitable to give our opponents incorrect odds to draw and how it matters to the profitability of our hand?

Why is it almost always most profitable to give our opponents incorrect odds to draw and how it matters to the profitability of our hand?

Assume we are on the turn and we know our opponent has a draw with 33% equity and we have a made hand (we have 66% equity). Our opponent needs 2-1 odds to break even on his call.
To simplify analysis, we assume opponent never bluffs, so the only way we can get value is by betting while we’re ahead.
Assume the pot is $2 on the turn and we both have $1000 stacks

Basically I can say there are 2 main options for me with a made hand on the turn.
1. to go all in and he’ll fold 100% of the time and I win the current pot on the turn
2. To bet an amount that is less than all in that he will always call. This second option has 3 variations

a.) giving our opponent profitable odds to call
b.) giving our opponent break even odds to call
c.) giving our opponent less than break even odds to call

So let’s compare the our EV for each of the 4 options (1, 2a, 2b, 2c)

1.) I go all in on the turn and he folds 100% of the time, I win the current pot
my EV=$2.

2a.) I bet $1 into the $2 pot, he calls. Pot by river is $4, we have 66% equity which is $2.67, but we must subtract cost of our $1 turn bet. So our EV= $1.67

2b.) I bet $2 into the $2 pot and he calls. Pot by river is $6; we have 66% equity which is $4. But we must subtract the cost of our turn bet. So our EV=$2 when we let him see the river at break even odds

2c.) I bet $4 into the $2 pot and he calls. Pot by river is $10, we have 66% equity which is $6.67, but we must subtract cost of turn bet. So our EV=$2.67

As long as we have over 50% equity then every extra dollar that goes in on the turn will increase our profit but may not be the most +EV decision relative to the other options.
The highest EV is when villain calls with unprofitable odds.

This math behind this changes if it’s multiway, and if villain bluffs his missed draws then our EV decisions must factor in how he will interpret and react to our bet, check, or bet sizing so that we extract maximum value from whether he plays his hand straight forward or bluffs

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