When I read Blackjack Attack, I thought the section on risk-averse indices was great.
The classic example is 10 vs 10. The expectation-maximizing index for doubling is +4, but that raises your vol so much that your SCORE actually decreases. To maximize your SCORE, you should use +7.
What about insurance? The expectation-maximizing index is +3, but in some cases (e.g. when you have a natural), taking insurance reduces your vol, so the insurance index should be lower. And there are other cases where insurance increases your vol.
I found a technical paper on this once. It wasn't very practical sinc e it required you to memorize a lot of stuff and then take partial insurance in a lot of cases.
Does anyone have a good rule of thumb for insurance? Seems like you could really improve your SCORE if you do this right.
