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Researchers Create a Statistical Guide To Gambling
New submitter yukiloo writes "An early Christmas treat for the ordinary Joe who is stuck with a Christmas list that he cannot afford and is running out of time comes from two mathematicians (Evangelos Georgiadis, MIT, and Doron Zeilberger, Rutgers) and a computer scientist (Shalosh B. Ekhad). In their paper 'How to gamble if you're in a hurry,' they present algorithmic strategies and reclaim the world of gambling, which they say has up till recently flourished on the continuous Kolmogorov paradigm by some sugary discrete code that could make us hopefully richer, if not wiser. It's interesting since their work applies an advanced version of what seems to be the Kelly criterion."
Half this submission makes no sense, grammatically or otherwise.
The news story posted on Slashdot not that long ago on a casino successfully suing a gambler of all his winnings because the machine's system for preventing you from winning wasn't working tells me that the only paradigm in use is "give us your money... or else!"
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
http://www.maa.org/joma/Volume8/Siegrist/RedBlack.pdf
The three authors completely agree on the mathematics, but they have somewhat different views about the
significance of this project. Here they are.
Evangelos Georgiadis’ Conclusion
We provided a playful yet algorithmic glimpse to a field that has up till recently flourished on the Kolmogorov,
measure-theoretic paradigm [as evidenced by the work of Dubins and Savage [4] (see [7] for more recent
developments]. The advent and omnipresence of computers, however, ushered an era of symbol crunching
and number crunching, where a few lines of code can give rise to powerful algorithms. And it is the ouput
of algorithms that usually provides insight (and inspiration) for conjectures and theorems. Those, in turn,
can then be proven in their respective measure-theoretic settings. Additionally, a computational approach
lends itself easily to more complex scenarios that would otherwise be considered pathological phenomena
(and would be fiendishly time-consuming to prove – even for immortals like Kolmogorov and von Neumann).
Doron Zeilberger’s Conclusion
Traditional mathematicians like Dubins and Savage use traditional proof-based mathematics, and also work
in the framework of continuous probability theory using the pernicious Kolmogorov, measure-theoretic, par-
adigm. This approach was fine when we didn’t have computers, but we can do so much more with both
symbol-crunching and number-crunching, in addition to naive simulation, and develop algorithms and write
software, that ultimately is a much more useful (and rewarding) activity than “proving” yet-another-theorem
in an artificial and fictional continuous, measure-theoretic, world, that is furthermore utterly boring.
Shalosh B. Ekhad’s Conclusion
These humans, they are so emotional! That’s why they never went very far.
Shalosh B. Ekhad is a computer, not a computer scientist.
is not to play.
The paper is about how much to bet (your strategy) on a given round if you have x dollars and want to win N dollars. This is problematic for two reasons.
First, their method only works when the probability of winning is >0.5, which never happens in any real casino.
Second, almost nobody really bets this way. Most people don't go to a casino looking to win N dollars. Instead, they go to the casino hoping to play for time T without losing more than N dollars (although people might not be up front about that goal).
Another problem is that they assume that the probabiilty is constant with each round. That's true for some games (roulette), but not for others (blackjack).
Your summary accurately describes the definition of gambling as opposed to investing.
;)
Gambling is placing money at risk with an expectation of loss.
Investing is placing money at risk with an expectation of gain.
I hope I'm not the only one who finds it odd that the state lotteries they sold the public by claiming "The funds will benefit education" would put themselves out of business if people were actually learning math.
How to lose all your money gambling during the holidays in a bad economy because you don't understand multivariate calculus. Accompanied by a Maple package on a separate site. Note: Do not attempt to eat the maple package after you've gambled away your grocery money.
I'm not sure if the original submitter had his tongue in cheek by describing the co-author Ekhad as a "computer scientist." Just in case he didn't, note that Shalosh B. Ekhad is actually Zeilberger's computer. Since most of Zeilberger's research depends heavily on computations, and (I think) as a nod to some of his philosophical positions, Zeilberger usually lists his computer as a coauthor on his papers. So I guess Ekhad is a computer scientist, but not quite in the way we usually mean. :)
You don't have to be bad at math to play the lottery. A buck for a ticket is a small price to pay for the entertainment you get when the numbers come up. Especially if your friends play, it can be a social event when the numbers are announced.
nope. Gambling is for an expectation of pleasure. And with an external locus of control.
The Cloud - because you don't care if your apps and data are up in the air.
According to the paper they are (initially) using a p=3/5 for an even return which to me is a hypothetical or illegal situation.
Am i missing something here or is this just a paper for if you find your self in lucky situation where the house is loss leading?
Sounds like the powers-of-two system. It allows you to shift the odds to where you will almost certainly make a small amount of money... but run a small risk of losing a huge amount. The mean return is still the same as random betting, but the distribution can be to the advantage of some gamblers.
I hope I'm not the only one who finds it odd that the state lotteries they sold the public by claiming "The funds will benefit education" would put themselves out of business if people were actually learning math.
Or that anyone that knows the definition of "fungible" or "general fund" would already know the lotteries *can't* benefit education. But the lottery isn't only for bad at math. Where else do you have a non-zero chance of making millions from a $1 investment within a week's time?
Learn to love Alaska
Worked for MIT students, for a while.
Learn to love Alaska
If you derive pleasure from losing money, send me $20 and I'll respond with an email telling you whether or not you won $40. ;)
Second, almost nobody really bets this way. Most people don't go to a casino looking to win N dollars. Instead, they go to the casino hoping to play for time T without losing more than N dollars (although people might not be up front about that goal).
People usually go to a casino with as much money as they are willing to lose. I also think the idea of spending at least a given time wile losing a set amount is a bit absurd unless it involves the chance of winning.
You could make a case for a fun casino evening involving maximizing your chances of winning N dollars within time T1 while still not going broke before time T2. A strategy of proportional betting (I assume the paper does that) will limit your chances of going broke regardless.
Eating the software is probably better for you than running it.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Explain how people learning math would put the lottery out of business. People are gambling for an adrenaline rush, not to satisfy some mathematical equation. Guess what, some people posion their bodies with alcohol on occasion to enjoy the side effects. Some of them even have extensive education in biology and medicine.
A fool and his money are easily parted
Explain how people learning math would put the lottery out of business. People are gambling for an adrenaline rush, not to satisfy some mathematical equation. Guess what, some people posion their bodies with alcohol on occasion to enjoy the side effects. Some of them even have extensive education in biology and medicine.
People who drink alcohol live longer than people who don't. It's a fact: http://www.time.com/time/magazine/article/0,9171,2017200,00.html
And this this study includes heavy drinkers that pull down the average life span of general alcohol consumers...
Your summary accurately describes the definition of gambling as opposed to investing.
Gambling is placing money at risk with an expectation of loss.
Investing is placing money at risk with an expectation of gain.
So, pumping money into a [commodities|housing|internet|gold] bubble really is considered investing then? I guess this explains a lot (and yes, this is a slam on the sheeple not the parent).
If you derive pleasure from losing money, send me $20 and I'll respond with an email telling you whether or not you won $40. ;)
Are you referring to the upcoming Facebook IPO, or is this a new scam of your own creation :)
Throw your money in the garbage.
God spoke to me
You don't have to be bad at math to play the lottery. A buck for a ticket is a small price to pay for the entertainment you get when the numbers come up. Especially if your friends play, it can be a social event when the numbers are announced.
Well, honestly, you play correctly. If you're not actually expecting to win, but you find some entertainment in sitting there with your friends waiting for the numbers to come up, more power to you. I don't think you represent the majority, though. I think most of the people playing the lottery are people who spend money that they could actually use for more practical things, in the hope of moving up from poverty. I don't have numbers to back this feeling up, but I do see those local news stories every time the jackpot goes up into the $200 million range with poor schmoes buying hundreds of dollars worth of tickets. Congratulations, dude: you just increased your odds of winning from nearly impossible to still nearly impossible.
The above is not an argument against the lottery, btw. I don't think the government should be in the business of protecting people from their own bad decisions. It is, however, an argument for better public education. People would make less bad decisions if they had the tools to analyze a situation better.
Warning: Opinions known to be heavily biased.
Reminds me of a successful scam I read about, from back in the late 1950s or thereabouts. They put an ad in the classifieds of many papers, saying simply "Send your dollars to GEB, PO BOX 123". Lots of people thought this was some charity and sent money. The Postal Inspectors (US Postal Service police) came after the guy, charging him with mail fraud. His successful defense was that he made no promises, only asked people for money.
AFAIK this particular trick was quashed in the future, as newspapers refused to take ads like that.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
Considering that your chance of winning is somewhat less than that of being hit by lightning, I'd say there are lots of ways with similar odds. (Walking across the street and getting gently struck by a car driven by)|(Doing a good turn for)|(Some other event involving) a rich elderly person who makes you his/her sole heir is probably at least as likely.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
So, pumping money into a [commodities|housing|internet|gold] bubble really is considered investing then? I guess this explains a lot (and yes, this is a slam on the sheeple not the parent).
This depends solely on the strategy you employ when investing in securities. If you sell the farm to buy shares in ABC co. because the neighbor, the guy at work, Bob the stock broker, etc said it was "a really hot stock, a can't miss oppourtunity." well, then I'd say you're an idiot, you are gambling, and it's probably going to bite you because you don't know how the market works. [This is especially true of the housing bubble. I was working construction at the time, and people were having brand new houses built for them, using no-doc loans, and putting them up for sale without ever moving in, in an attempt to earn 6% or so. Crazy. Houses are long term investments, not slot machines.]
That said, if you do some basic analysis, and all factors indicate the market is growing, and you buy into it, and you use stop-loss orders to limit your risk, and you sell when all analysis says the run up is over, then you are investing, because you are doing the work required to shift the otherwise close to 50/50 odds in your favor to the point where you gain a mathematical advantage.
If you like to gamble, I tell you I'm your man
You win some, lose some, it's - all - the same to me
The pleasure is to play, it makes no difference what you say
I don't share your greed, the only card I need is
The Ace Of Spades
The Ace Of Spades
Playing for the high one, dancing with the devil,
Going with the flow, it's all a game to me,
Seven or Eleven, snake eyes watching you,
Double up or quit, double stakes or split,
The Ace Of Spades
The Ace Of Spades
You know I'm born to lose, and gambling's for fools,
But that's the way I like it baby,
I don't wanna live forever,
And don't forget the joker!
Pushing up the ante, I know you've got to see me,
Read 'em and weep, the dead man's hand again,
I see it in your eyes, take one look and die,
The only thing you see, you know it's gonna be,
The Ace Of Spades
The Ace Of Spades
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a rich elderly person who makes you his/her sole heir is probably at least as likely.
I think you are wrong. Unless by "doing a good turn for" you mean "giving lots of blowjobs to" and you are Anna Nicole Smith, it never happens. You'd be more likely to be hit by a movie director and cast in a new movie from that encounter, which, to my knowledge, has never happened either. At least someone wins the lottery every week or so, that's a "sure thing" in that *someone* will win it. So why not you? Jumping out in front of expensive cars as a retirement plan and giving blowjobs to whoever passes by doesn't sound as desirable.
Learn to love Alaska
My guide to making the most money gambling: Don't.
In any casino the odds are always, ALWAYS stacked against you. They don't hide this fact, either. The odds are published and you can easily notice that the payout is less than the probability of getting something. They are in business to make money, it has to be this way or they'd go broke.
So don't gamble to make money. If you enjoy the thrill of it, if it entertains you, and you can afford it, then by all means. But don't try and find some way to gamble "quickly" that will make you money because it won't. Any money made is purely luck and your strategy of what you bet on will play very little in to it.
Play the game for enjoyment.
In terms of a machine that malfunctions and pays out more than it should, it'll be noticed quickly these days (they are all networked and watched) and you'll have to give the money back. Cheating isn't allowed. I don't mean that is a casino rule, I mean legally. If you find a way to game the system, the casino is in their legal rights to not pay you winnings.
In terms of counting cards they solve this problem by frequent reshuffling and using multiple decks of cards. Try effectively counting cards if there are 6 decks in use at once and the reshuffle after ever 4 game or something (remember there are machines to do it that make it efficient).
...namely, that (1) Statistically, the house always wins overall and (2) If you come up with a system that actually stands a chance of changing this they'll (a) change the rules, (b) break your legs (or kill you or whatever...) and/or kick you out, (c) accuse you of breaking *their* rules, such that the effect is that... statistically, the house always wins overall.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
If you want entertainment, get a blackjack app for your phone. It'll cost less than a lottery ticket.
Plenty of people play a lottery, even knowing they can expect a loss (my mum is a maths teacher, yet still enjoys playing the lottery on occassion). Expectation is not always the best metric to use when thinking about games of chance (for example, see the St. Petersburg Paradox: http://en.wikipedia.org/wiki/St._Petersburg_paradox). I'm perhaps playing devil's advocate a bit here, but consider a person who earns a low wage and has no possibility of ever increasing this wage except by winning a low probability game of chance that costs a very small nominal amount to play and entails an expected loss with each play (ie a lottery). If the cost of play is a small proportion of weekly earnings, it seems reasonable (to me at least) that from a utility perspective, the person would choose to play the lottery. The key point is that if the payout is large enough, then the person will stop playing if they win (hopefully), so the concept of expectation (ie, number of plays going to infinity) is not necessarily the right metric.
In blackjack, watch the cards closely. Every time a 2-6 is dealt, add 1. Every time a 10, jack, queen, king, or ace is dealt, subtract 1. For example, if someone is dealt blackjack (A-10), subtract 2. If the running total since the last shuffle is at least four times the number of decks left in the shoe, the house is loss leading.
Actually, I would argue that "giving blowjobs to whoever passes by", done in the right location, would arguably have a much higher chance of earning significant money. :P
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
But that becomes an issue of work for hire, rather than a small effort massive payouts.
Learn to love Alaska
Yes, it's fun to bet a small amount of money now and then (the more you're losing, the less fun it is)
Also, a large amount of money may be proportionally more useful to someone than a smaller amount of money, in which case it may make sense for that person to bet seemingly against the odds
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
I think your argument makes a lot of sense to be used against a lottery. At least.. against a state-run lottery. Government shouldn't be in the business of protecting people from their own decisions, but neither should it be in the business of encouraging people to make decisions that are harmful to themselves.
If we're not going to allow non state-run lotteries, then we shouldn't have any lotteries at all.
Can you be Even More Awesome?!
yes, there can be entertainment value in the game itself, and even simple games can be more fun as a social activity, betting or not
yet the theoretical possibility of a payout helps because it's fun to think about what you'd do with the prize money.
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
After having read the paper it becomes evident that both authors have a liking for analyzing the problem in a discrete light. My degree is in mathematics, number theory so I am slightly biased myself. For that matter, I got intrigued by the fact that when dealing with the continuous version of gambling one does deal with unrealistic assumptions. One of which is ... money is indefinitely divisible which of course this is a bonkers assumption. Now assuming money has finite integral values, the analysis becomes much more difficult, particularly in the light of edge effects. So, that is why the authors seem to resort to heavy computer simulation.
This just enforces my point -- as pointed out in the article the social benefits of drinking from time to time, and the quality of life they ensure, outweighs the biological side effects of poisoning oneself with ethanol. (well, that, and the fact that abstainers in the study were much more likely to be poor, with all the life expectancy decreases that come with it.)
I bet if you control for socioeconomic status, the gamblers would also prove to live longer for the same reasons -- while it indeed shits on their wallets, it also means they aren't uptight puritans and can roll with some punches in life and blow off stress.
every time the jackpot goes up into the $200 million range with poor schmoes buying hundreds of dollars worth of tickets. Congratulations, dude: you just increased your odds of winning from nearly impossible to still nearly impossible.
That's the part I don't understand. Although I virtually never do it, I can understand buying one ticket. Your first ticket converts your odds of winning from exactly zero to almost zero. The second ticket is just degrees of almost zero.
And yes, of course each ticket has the same probability of winning, so you do get the same increase in odds for that second ticket. However, those odds are terrible, so doubling your near-zero odds of winning isn't a rational move. The first ticket provides that unquantifiable excitement / entertainment value. The second is just throwing money away.
I hope you mean expectation in the statistical sense, rather than the emotional one.
All of this effort and brainpower to produce a guide that might as well say "Don't gamble"
http://slashdot.org/comments.pl?sid=2564466&cid=38311516
there is no hope. My grandfathers both made a point of it.
All your database are belong to U.S.
I think your argument makes a lot of sense to be used against a lottery. At least.. against a state-run lottery. Government shouldn't be in the business of protecting people from their own decisions, but neither should it be in the business of encouraging people to make decisions that are harmful to themselves.
Well, I like that it's a way for the government to raise money which is entirely voluntary. I'm not one of those guys who are completely anti-tax, but that doesn't mean I don't prefer a form of voluntary tax, which is what the lottery is, over the compulsory kind whenever possible. I also don't see it as encouraging bad behavior anymore than a government building a bridge is encouraging people to jump off it. It is possible to cross a bridge safely, and it's possible play the lottery responsibly, so if you don't it's your own fault. What's sad is that a lot of people don't know that they are playing irresponsibly, because they don't really understand the odds.
That said, I do agree with you that we should allow lotteries that not state-run as well. I don't like anti-gambling legislation. Gambling regulation is fine, and even necessary in order to prevent scams, but prohibiting gambling all together is the government trying to be your nanny.
Warning: Opinions known to be heavily biased.
In gambling you don't get to wait for a better day before cashing in. In investing, you can "Buy low and Sell high" Very few stocks never return to and pass the purchase price unless you bought at a peak (buy high is bad) unless the stock goes bust. On average the market does well with it's ups and downs to enable buy low sell high. Lotto and casino games do not provide that option.
The truth shall set you free!
I hope I'm not the only one who finds it odd that the state lotteries they sold the public by claiming "The funds will benefit education" would put themselves out of business if people were actually learning math. ;)
You do know that lotteries (and in fact and game that includes a progressive jackpot) can be wagered with positive expectation, right?
Just asking, because you go on about gambling being an expectation of loss and investing being an expectation of gain..
"His name was James Damore."
You do know that lotteries (and in fact and game that includes a progressive jackpot) can be wagered with positive expectation, right?
Yes. I am aware of a few instances where groups have gamed the lottery by purchasing enough combinations of numbers to guarantee a win. After which point, the various state entities operating the lotteries either passed regulation making it illegal to do so, or have changed the mathematics of the game to prevent it.
;) to the end, in the hopes that people would interpret it as the tounge-in-cheek funny-ha-ha it was intended to be, but alas, this is slashdot, where serious is ridiculous and funny is serious.
... above numbers are purely hypothetical and plucked from thin air for the sole purpose of illustration. Any resemblance to an actual numbers used to execute a successful business strategy or wager on a game of chance is purely coincidental. Actual numbers have been changed to protect the innocent.
My comment about lotteries and math, wasn't intended to be taken as seriously as it has been. I attached a wink
That said, buying 1 ticket with a 1 in 20 million chance of a positive outcome, is gambling.
Planning and executing the logistics required to purchase 5 of 20 million tickets to guarantee a positive outcome, is investing and executing a business strategy like any other.
Disclaimer
I know what they are and yet I don't see how that leads to your conclusion. Care to enlighten me?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
The funds "earmarked" for education are "matched" by a reduction in funding from the general fund. So the net funding is not changed, but more money is left in the general fund to spend on other things not education related. Or, as happened in Texas, they got the lotto, then reduced the overall funding for schools, greatly reducing the burden on the general fund, but having the lotto coincide with a *decrease* in funding for schools.
Learn to love Alaska
What proportion of people that don't drink alcohol are doing it because of a health condition that prevents them from doing so, though? Correlation is not the same as causation.
I find that the state lottery significantly increases my happiness during low spots. The Arizona Lotto used to (and may still) have the slogan, "You can't win if you don't play." In fact, if I do play, I am able to daydream of what would happen in the exceptionally unlikely event that I won. How that day would go, how successive days would go, how I could be smart with the money, how I could avoid pitfalls, etc. Heck, I can replay the joke over in my head about the guy stuck on his roof in a flood, avoiding all driftwood, boats and even the helicopter because God would save him. He died and demanded of God why he was allowed to die. God wanted to know who he thought sent all the rescuers! During the times I'm dissatisfied with my job, I can really drag down if I can't daydream about that 1 in 5 million chance I'll win the million bucks -- if I never play, the odds get significantly worse.
For about 6 months, I played the lottery in Vermont weekly. I would gamble $2/week, and pretty much every other week, I would win $4. Against the odds, I broke even for about 4 months before hitting "a dry spell". I kept tossing the money in, and ended up winning $50. Not enough to make a profit, but enough to pay for the hobby and to continue to break even.
But there is a risk of being arrested.
Funny, I think just the opposite. Since people seem to find a way to gamble one way or another (case in point, the current state of online poker), the profits may as well go to something useful and be run by a group that is ostensibly accountable to the public. I think the government would be much better suited to take a holistic view of gambling and encourage it less than a private entity.
Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon. -- Susan Ertz
I play the opposite way; It's not that entertaining to me, and I play to win. However, I understand that my chances of winning are very slim, so I play only when the payout is (to me) worth the cost of lunch (Euromillions hitting â100m+ typically). I don't expect to win, but the possibility is worth the payout.
It should be noted that this means I've spent around £50 on the lottery since 2008.
Finally had enough. Come see us over at https://soylentnews.org/
Chance to win the lottery if you play: Extremely small.
Chance to win the lottery if you don't play: Nill.
My math tells me that purchasing lottery tickets does not affect my financial situation in any significant way, but winning the grand prize would.
It's a win/loss situation with the odds of winning being roughly as small as the consequence of losing.
I would do the same thing, but the possibility of multiple winners screws up the expectation value calculations. My gut feeling is that most people underestimate the risk:reward ratio, and therefore there is no jackpot level at which the expectation value is over unity - there will always be enough people playing that the risk of a split jackpot cuts the expectation value sufficiently to counter any increase in the pot.
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