09-29-2005, 07:52 PM
This may seem easy for you mathamaticans out there, but I am unsure of this. In measuring the economic profit (benifit) as opposed to Accounting profit, is the accounting of implicit cost (opprotunity cost). So the elementry model for Economic profit is
= Benifit- Explicit Cost- implicit Cost
My question is the model of economic decision making apply to poker and other gambling decisions that people make? Is expected value a gambling variation of this concept? or Is expected value the formula for figuring out implicit costs of a decision. Here is a scenario:
A man has a card draw to an inside straight draw. The pot is heads up and contains $150. The man with the draw is facing a $10 bet.
*Well expectation tells us a call is profitable in that the pot is laying him 15 to 1 on a 10.5 to propostion.
Can this data be factored into the Economic Profit model.
Profit(of folding)= Benifit-ex cost- imp cost(cost of calling)
I would think the opprotunity cost of folding would be the Pot Equity of $13 (approximation). The ex cost would be O is he folded. And there is really no measueable benifit to folding.
In measuring the economic profit of calling. What would be the benifit? The Opprotunity cost? Would The ex cost be $10 or $9.40 ( The expectation of the $ used to call) ?
This may be a stupid effort of thinking on my part, but I was wondering if this model can demonstrate how expert gambling decsions can be shown in this model.
-Mike
= Benifit- Explicit Cost- implicit Cost
My question is the model of economic decision making apply to poker and other gambling decisions that people make? Is expected value a gambling variation of this concept? or Is expected value the formula for figuring out implicit costs of a decision. Here is a scenario:
A man has a card draw to an inside straight draw. The pot is heads up and contains $150. The man with the draw is facing a $10 bet.
*Well expectation tells us a call is profitable in that the pot is laying him 15 to 1 on a 10.5 to propostion.
Can this data be factored into the Economic Profit model.
Profit(of folding)= Benifit-ex cost- imp cost(cost of calling)
I would think the opprotunity cost of folding would be the Pot Equity of $13 (approximation). The ex cost would be O is he folded. And there is really no measueable benifit to folding.
In measuring the economic profit of calling. What would be the benifit? The Opprotunity cost? Would The ex cost be $10 or $9.40 ( The expectation of the $ used to call) ?
This may be a stupid effort of thinking on my part, but I was wondering if this model can demonstrate how expert gambling decsions can be shown in this model.
-Mike