Whats the optimal hedge here? (survivor pool)
A friend has gotten down to heads up in our yearly NFL survivor pool. (sadly I've been out since like week 3). Anyway, he now has 1 man to beat to win a pretty decent sum of $2650. Obviously as we go in to this weekend he is looking to hedge his bet. We threw around some ideas, but I'm not sure what is the most optimal way to hedge. The obvious thought is to bet against his own pick.. Say $500. This guarantees him $500 if he blows the pool, at least giving him some return. The worst case here is that he wins his pick but so does the other guy, then he has just thrown away $500. So I was thinking maybe add a bet with his opponent to hedge this risk a bit.. Of course then that opens up the possibility that he wins the pool and loses both side bets. Assuming sum of the side bets is less than half the pool winnings I think its a +EV move. I think this is getting close to optimal, but I'm still not sure there isn't a better route... Other thoughts?
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