KozaKBR 
Joined: Jan '08
Location: Brazil
Age: 36 (M)
Posts: 273
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Remember All quotations are from the book: The Theory of Poker
 CHAPTER TWO – EXPECTATION AND HOURLY RATE
“Mathematical expectation is the amount a bet will average winning or losing”.
“Hourly rate is the amount of money you expect to win per hour.”
Let’s suppose you and a friend a betting $1 on the flip of a coin. If you win you get $2 ( $1 from your bet and $1 from his bet). You have 50% chances to win. So after 10 flips, you will have bet $10 and won 5 times ( 5 * $2 ) which makes you your $10 back. Your net win is $0, and if you flip the coin 100 times per hour, your hourly rate will be precisely $0.
Now lets suppose you friends decides to bet $2 to your $1 ( he will bet $2 and you will bet $1, if he win he will get $3, if you win you will get $3 too). You still have 50% chances of winning. So after 10 flips you will have bet the same $10 and won the same amount of times, 5, BUT the money you won will change ( 5 * $3), you will earn $15. You will make a profit of $5 after 10 flips, that’s make a 50 cents net win, and if you flip the coin 100 times per hour, your hourly rate will be precisely $50.
Mathematical expectation has nothing to do with results, your friend can win 10 times in a row, but in the long run, you guys will have won the same amount of times, or very close to that.
“Anytime you make a bet with the best of it, where the odds are in your favor, you have earned something on that bet”, so even if your friend win the 10 ten flips, he lost $5. (That’s strange, I KNOW, LOL).
“You have the best of it when you have a positive expectation, and you have a positive expectation when the odds are in your favor... What does it mean to have the odds in your favor?”
It means you have a positive Net Win, like in the situation I just showed you.
“Mathematical expectation is the heart of every gambling situation.”
MATHEMATICAL EXPECTATION IN POKER
“Poker plays can also be analyzed in terms of expectation.” Imagine you have the nuts, and a player bets before you, if you raise you are almost sure that the others two players will fold and will gain only 1 unit from initial bettor. But if you just call, the others two may call it too, and you will win two units, which makes your mathematical expectation much better.
“Another important reason to understand expectation is that it gives you a sense of equanimity toward winning or losing a bet: when you make a good bet or a good fold, you will know that you have earned or saved a specific amount which a lesser player would not have earned or saved.
HOURLY RATE
“As suggested in the coin-flip example at the opening of this chapter, hourly rate is closely related to expectation, and it is a concept especially important to the professional player. When you go into a poker game, you should try to assess what you think you earn per hour.” You will learn to do that by experience and during the learning of the book.
“In the long run a poker player’s overall win is the sum of his mathematical expectations in individual situations. The more plays you make with a positive expectation, the bigger winner you stand to be… Once you have decided what your hourly rate is, you should realize that what you are doing is earning.”
“If you have estimated your hourly rate correctly, your eventual winnings will approximate your projected hourly rate multiplied by the total hours played. Your edge comes not from holding better cards, BUT FROM PLAY IN SITUATIONS WHERE YOUR OPPONENTS WOULD PLAY INCORRECTLY IF THE HAD YOUR HAND, and you had theirs. The total amount of money they cost themselves in incorrect play, assuming you play perfectly, minus the rake, is the amount of money you will win. Your opponents’ various mistakes per hour will cost them various amounts of money. If the hands were reversed, you wouldn’t make these mistakes, and this difference is your hourly rate. That’s all there is to it. If they play a hand against you differently from the way you would play it five times an hour, and if it’s a $2 mistake on average, that’s a $10-an-hour gain for you.”
CHAPTER 1
http://www.bankrollmob.com/forum.asp?mode=thread&id...
TABLE OF CHAPTERS
http://www.bankrollmob.com/forum.asp?mode=thread&id...
Edited by KozaKBR (21 February 2008 @ 00:50 GMT)
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