Quote:
Originally Posted by browni3141
Cannabusto is arguing that Lags converge to their win-rate faster (they have a lower standard error of the mean) despite having greater variance. I am arguing that greater variance necessarily equates to having a greater standard error over the same sample size.
Also, some people ITT actually are arguing that playing more hands will have lower variance.
I'll just respond to this post since this really sums up the crux of the disagreement.
Standard error of the mean is not a measure of spread or dispersion in the data points, like variance or sd is. It is a measure of the spread of sample means, and so, is measuring how close we are likely to be to the population mean. I think we all agree here.
I believe I can bust through our disagreement in this post. Yes, you're right that for any given sample of a poker player, the higher the variance/sd, the higher the SEM. The numerator in the SEM calculation is increased, which necessarily increases the SEM.
But of course every poker player's results is a separate population in statistical terms. Each will have a different distribution based on talent, tendencies, and playing style.
Despite LAGs having greater SDs, and thus greater numerators in the SEM calculation, they have greater Ns too, and so the denominator grows and shrinks the SEM being calculated despite the numerator value being higher than the average poker player's.
This is not shown in application because we measure N by hours or by hands. When actually, theory tells us the best way to measure N in our case is by measuring amount of cards seen AKA betting rounds played. Unlike most statistical applications, we know in poker that noise/luck/randomness is entirely a function of the cards. The difference in Real Bucks - Sklansky Bucks is entirely accounted for by how the cards runout. But the calculation assumes that all Ns are created equal.
And so that's where the issue lies--yes, the raw measure of SEM will be higher for LAGs. Ironically, this is the very reason they converge to EV faster--by being exposed to more and more noise/outlier events/luck sooner by virtue of playing more hands than most players, each subsequent rare event impacts the set less and less. The LAG encounters more rare events per hour than does the TAG. Over an infinite sample, the LAG gets all of the luck events that could happen to him out of the way sooner than the TAG. And so his EV is solely a function of his skill at a sooner point, whereas the TAG must get closer to infinity than the LAG. This is why 100 LAG hours are less noisy than 100 TAG hours despite being more dispersed/higher variance. Again, this doesn't mean playing every hand is good if it lessens your EV.