Villain - MP ($400) is a reg who seems competent post flop. I've played with him before. He is LAG but not totally crazy... maybe 30/24-ish. He raises a ton in BTN/CO. He plays a lot of Qx, Kx, Ax, both in and out of position. I give his range a little more credit here for being MP instead of BTN/CO. In my previous session with him, he was caught bluffing several times by stabbing at pots when other players show weakness.

Hero - BTN ($250) is probably viewed as weak-tight. The table has been extremely loose and station-y, and I've tightened up a bit as a result. My few pre-flop raises got 3-5 limp/callers so I have been shutting down a lot if I miss. Only notable hand I had with the villain, he checked to me in an AJ9 flop and I fired two 1/2pot barrels with QTss before checking back on river. He had A8, and I mucked.

Folds to Villain who makes it $8. Hero flats with AQo (no diamond). SB/BB fold.

Flop: As 8d 2d (Pot: $18)
Villain bets $15, Hero calls

Turn: Qd (Pot: $43)
Villain insta-bets $50. It was either right before the Qd came out, or at the exact time it came out.

Hero? Assume we can't fold here... do we call or raise, and what's our plan for river?

Against this villain, I'm raising preflop for value and the initiative. I think your hand is under ripped and I don't think you can be too worried about the flush.

I'm flatting the turn to keep his Ax/air in and calling/value betting any non diamond river.

Seriously, you've got to start 3-betting more preflop.

I find this is a huge leak at the 1/2nl level. Whenever we notice someone is raising light we have got to 3-bet them mercilessly. My 3-betting range vs light openers is as wide as 97s+, 88+ when I have a tight image. You can rep the A or K so in effect you get to play 4 cards against their two cards and completely own them with hands they will never ever put you on.... Then my 3-betting starts to become a matter of frequency instead of range. Since I will be 3-betting these guys so much I can then start to be more selective in when/how I 3-bet...

Basically, whenever you notice someone opening light and you have position on them, you should be 3-betting them a decent percentage of the time whenever you have a playable hand. Similarly, you should be prepared to rep the A or K post flop...

As played, given the auto-bet before the next card comes out, I'm not all that worried. AK and AJ can make that auto-bet and we crush those hands. Sucks if he hit is diamonds but meh, I think he has enough hands we beat in his range. So the question is, do we raise for value or do we flat and let him own himself with his aggression.

Your OP said he likes to bet/bluff when weakness is shown. Since we have position on him, and since his turn bet was for pot, I"m fine with a flat here. We can flat and he will pot the river and then we can raise him.

If we think he will spazz out to a min-ish raise on the turn, I'm good with that as well. But basically, based on OP and V description, I think either line (raise or flat) is fine...

Excellent post DGI

I'll note that Doyle Brunson has written that he's lost more money with AQo than any other hand. The reason is that against decent competition, nobody is raising ATo very often. You're going to lose going to show down much of the time unless you spike 2 pair+.

AQo in my mind is a raise or fold hand. If someone is raising light, 3betting AQo is great. If someone's range is JJ+, AK, it is an easy fold.

As played, I'm concerned about the over bet on the turn. I don't think he has a flush because he wouldn't be trying to push you out. I don't normally put people on 1 hand but this smells like a set of 8s. If he has just top pair, anything we do now is going to spook him enough to check the river. He's done putting money in the hand after the turn. So I'm not worried about getting any more money out of TP. We've played so far like we have a FD. Therefore, the question is whether he can lay down a set. If no, I'm done. I might call the turn, but any bet on the river is a fold unimproved. If we shove, we offer him 3:1 when he needs 4:1 to call to get a FH. A reg would have to be more than competent to take the hint and fold.

If I'm playing my A game, I'd fold. If I'm playing my B game, I'd call the turn and fold the river to a bet.

We 3b AQo in this spot if villain will call oop with worse Ax hands. If not we flat this hand on the button and play in position against a range where we dominate all queens and all but one ace. And we are definitely not playing fit or fold on the flop if we flat pre. Basically always continue to some extent with this hand.

If villain is not calling a 3b oop with worse aces 3b AQ would be turning it into a bluff and that is a ridiculously large leak. In the instance of him not flatting aces that AQ dominates we should 3betting weaker aces and suited kings etc.

The reason for this is card distribution. Over time everyone gets the same cards in the same spots. Therefore we need to absolutely maximize each spot. We only get so many AQ's so we need to play each one to its full potential and in this case that means play it against a range that we dominate. Whether this means we should be 3betting or flatting, it's villain dependant so only OP will know

Thanks for all the great responses. I did consider 3betting here, but I did not want to fold out his Ax, Qx. Also I have to re-emphasize two things: he definitely raises a LOT more in BTN/CO than in UTG/MP, and that he seems competent postflop. He uses aggression in the right spots and folds when he thinks he is beat.

That said I completely agree that not 3betting villains like this is a leak. That is something I will focus on this week.

I think folding turn is a bit nitty. I think he can pot the turn with Ax and pair+draw combos just as well as a set.

I opted to minraise turn to 100 to charge any diamond draws. He tanked a little and called. River came 8x pairing the board and he insta-checked. I checked it back just because I didnt see him calling with worse, but could definitely justify shoving my remaining ~$130 into ~$250 pot for thin value.

Well he turned over Ad Kd and I feel that it was a cooler.

why would you shove 130 for thin value, if you are wrong it could be a significant loss ? why did you minraise the turn against a competent villain who pots it? did he actually show hands that were that weak when potting the turn? he has all 20 of the AK combos
I think when he pots the turn it narrows his range to maybe flushes and sets. the villain is LAG as your post states but you seemed to say that he was taking small stabs or bets at pots but nothing out of line
you have to be very careful and you might not have an idea of villain's range and tendencies/probabilities on different streets especially live

I would consider folding the turn. It is kind of difficult to know if he just hit that turn diamond and is spazz betting. don't you think villain would pause on a flush turn if he didn't have the flush? fast bets don't you think tend to be straightforward?
"Then my 3-betting starts to become a matter of frequency instead of range." by the way do you apply a GTO frequency to 3 betting with live reads?
if he has more than 50% hands that we are ahead of then can we 3bet 50% of the time?

can you devise a GTO or mathematical strategy for calling or folding the turn? it is difficult to construct a range for a villain live

I call the turn, and shove on any diamond as a bluff.

I don't really think villain is opening that many suited hands in MP perhaps that they would even have a low flush range here? and I think that a river shove would be a mistake

Any reason why you didn't value bet the river? Seems like a clear value bet to me.

but how can villain insta pot a flush turn with a non-flush hand? it seems most people would pause without a flush. is it because of a reg vs reg dynamic and iI guess that this is successful?