insuring good hands

M

Meistro

Well-Known Member
#1
#1
insuring good hands below the insurance index can be good cover, especially if you insure a twenty but don't insure the stiff. the theory goes that while insurance is a slightly negative EV bet below the index you have a pretty good chance of winning either the insurance bet or the hand and ending up in the black.

In Medellin, you are offered the opportunity to insure both at the start of the hand and at the end, before the dealer takes their hole card. Assuming you insure 20's at TC 2, stiffs at TC 3.5 and everything else at TC 3, at what count should you insure a total of 21 that you have hit to?

Or should we abstain from ever making an insurance wager below the index?
 
J

johndoe

Well-Known Member
#2
#2
JG had some useful things to say about insurance in ExCAA. Essentially "insurance" as a general concept (outside of blackjack) is about variance reduction, at some small expense - not necessarily a +EV play. So in many cases it can be worthwhile to buy insurance even under the actual index, if done thoughtfully.

I don't remember the complete analysis, though, I'd have to look it up.
 
M

Meistro

Well-Known Member
#4
#4
"Contrary to what numerous authors have argued, insurance is not a side-bet independent of your main hand. Though usually negative-expectation, the insurance wager will indeed reduce overall variance on the player's \good" hands. For instance, buying insurance when holding a natural will produce a zero-variance payo of 1 unit, hence the expression \even money."


"The last column of the above table shows that above some critical fraction, we will buy partial insurance (i > 0). Since this critical fraction is less than 9% of the bankroll, the Kelly player will be buying some insurance if his wager had been based on knowledge of the imminent Ace"
 
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