thecesspit
Joined: Apr 19, 2010
• Posts: 5936
January 13th, 2011 at 10:01:04 PM permalink
So what do you have after the bet is made?
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
mkl654321
Joined: Aug 8, 2010
• Posts: 3412
January 13th, 2011 at 10:02:57 PM permalink
Quote: thecesspit

So what do you have after the bet is made?

You have the bet's expected value, or if you prefer, the equivalent of the bet's expected value.
The fact that a believer is happier than a skeptic is no more to the point than the fact that a drunken man is happier than a sober one. The happiness of credulity is a cheap and dangerous quality.---George Bernard Shaw
FleaStiff
Joined: Oct 19, 2009
• Posts: 14484
January 13th, 2011 at 10:03:56 PM permalink
Quote: thecesspit

So what do you have after the bet is made?

Bated breath and a skipped heart beat.
thecesspit
Joined: Apr 19, 2010
• Posts: 5936
January 13th, 2011 at 10:04:37 PM permalink
So if I bet \$10 on a coin flip, which has an expected value of \$0, after the coin flip I have \$0, win or lose?
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
mkl654321
Joined: Aug 8, 2010
• Posts: 3412
January 13th, 2011 at 10:08:04 PM permalink
Quote: thecesspit

So if I bet \$10 on a coin flip, which has an expected value of \$0, after the coin flip I have \$0, win or lose?

What you have AFTER the flip is irrelevant. The bet had an expected value of \$10 (+\$0).
The fact that a believer is happier than a skeptic is no more to the point than the fact that a drunken man is happier than a sober one. The happiness of credulity is a cheap and dangerous quality.---George Bernard Shaw
thecesspit
Joined: Apr 19, 2010
• Posts: 5936
January 13th, 2011 at 10:12:19 PM permalink
Quote: mkl654321

What you have AFTER the flip is irrelevant. The bet had an expected value of \$10 (+\$0).

I must go re read the wizard's take on all this then, as clearly you either have \$20 or \$0, and if that's irrelevant, then I've no idea how you pay for your gas after a trip to play VP.
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
mkl654321
Joined: Aug 8, 2010
• Posts: 3412
January 13th, 2011 at 10:20:57 PM permalink
Quote: thecesspit

I must go re read the wizard's take on all this then, as clearly you either have \$20 or \$0, and if that's irrelevant, then I've no idea how you pay for your gas after a trip to play VP.

It's irrelevant in terms of measuring the value of the bet, and whether the bet was a good or a bad one.

Look at it this way. We bet on a roll of a single die. We say that you win if 1, 2, or 3 comes up. I win if 4, 5, or 6 comes up. We roll, and a 1 comes up--you win (let's say, \$1). Now we bet again, but this time, you only win if a 1 comes up--otherwise, I win. Same even money bet. You roll a 1 again--you win \$1.

Now, in each case, you won \$1, but the two bets were hardly equal. In the first case, your expected value was \$0.00; in the second case, your expected value was
-\$0.66. Your results were the same, but one bet was clearly much worse--had less value--than the other. The same reasoning would apply if you had rolled a 6 both times--the results would have been the same, but the bets did not have the same value--the latter was clearly worse.

One more time, the fact that you "clearly have \$20 or \$0" is irrelevant--that is after the bet is resolved. What IS relevant is that when the bet is made, you WILL HAVE either \$20 or \$0, and the relative chances of each of the outcomes, multiplied by the payoffs for each outcome, sum to your expected value.
The fact that a believer is happier than a skeptic is no more to the point than the fact that a drunken man is happier than a sober one. The happiness of credulity is a cheap and dangerous quality.---George Bernard Shaw
bbvk05
Joined: Jan 12, 2011
• Posts: 382
January 15th, 2011 at 8:26:11 PM permalink
mkl is absolutely right up here. He is calculating expected value of a bet. A 50/50 flip with equal pay would have an expected return of 0.0.
Ibeatyouraces
Joined: Jan 12, 2010
• Posts: 11933
January 21st, 2011 at 1:05:21 PM permalink
deleted
DUHHIIIIIIIII HEARD THAT!
dm
Joined: Apr 29, 2010