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Old 12-16-2005, 08:43 PM
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Default Re: Utility of Money vs Utility of Income

Your questions are very good questions, in my opinion these things are very important

1) People talk about this one a lot. Me personally, I look at every hand individually, and if I maximize my EV for that hand, I say to myself "awesome. I maximized my EV, I played well. I just have to sit here now and the money will eventually flow in." This makes me happy. Even when you fold J2o UTG, you have maximized your EV and therefor should be happy

In a way you are actually 'making money' because some other players faced with the same situation will not fold, and this means that if you are at their table, some of their loss in EV will be your gain in EV.

2) I am quite sure it would be. The only downside that comes to mind is that you become frivolous with money. But this is usually well worth it, becuase you will have more money to spend anyways. Unless you go like way overboard of course

3) It depends what you want. Why do you play poker? Some people think it's to maximize the EV of how much money they have, but I think this is wrong (but close)

If you were given a choice between getting a 50/50 shot at 3 trillion dollars, or getting a guarateed 1 trillion dollars, what would you take? I'd take the 1 trillion in a heartbeat. And I don't think there's anything wrong with taking the lesser EV choice in the case. That's because what's really important to me, is what makes me happy, not how much money I have (but that will indirectly affect my happiness)

The difference in 'happiness units' between my current state, and if I had 1 trillion dollars is far far bigger than if I had 1 trillion dollars and if I had 3 trillion dollars.

In conclusion, I recomend you do whatever makes you most happy on average, maximize your 'happyness EV'. You seem to already no this, and I'm just restating the reasoning here behing utility theory.

Of course this doesn't have to stop you trying to tinker with your own psycological mind and change what makes you happy (as in divorce your happiness from your short-term poker results)

But if that's unsuccessfull, maybe giving up EV to reduce variance (variance that your bankroll should theoretically be able to handle) is correct. After all, would you rather be constantly stressed your whole life but be a little richer, or be happy and relaxed all the time?
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