[Izverg04]

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The second sentence of the essay challenges the the reader’s beliefs about EV right from the start:

“Poker plays are best evaluated on a risk-adjusted basis, rather than simply considering Expected Value alone.”

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This statement is trivial and useless in practice at the same time. Dan, how much would you guess someone would lose, in terms of expected utility, if he played in a way that perfectly maximized expected value instead of expected utility? Would it be 1% of the winrate? 2%? Now how much do you think a typical expert player loses because he doesn't maximize his return (makes mistakes)?


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“The player with the better Sharpe Ratio is the better player. He makes more money per unit of bankroll on a risk-adjusted basis. It can be said that he deploys capital better, by managing risk more effectively.”

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Could you give a numerical example of what you mean? Because using Sharpe ratio in the context of poker really doesn't make sense in any situation I can think of.


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Sharpe ratio and its derivatives are being used to the best players, now, to make plays that increase reward per unit of risk, or lower risk per unit of reward, or both.

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I think you are inventing a class of poker players that really doesn't exist.

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[...] risk-adjusted (Sharpe ratio) value of a given play.

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Are you just using "Sharpe ratio" as shorthand for "risk-adjusting expected returns to obtain the expected utility of a gamble"? You are throwing Sharpe and other financial risk measures all over the place, and these are usually specific results to specific risk-adjustment problems that don't come up in the same form anywhere in poker.