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Eaglesnest
Eaglesnest
Joined: Jul 29, 2014
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August 29th, 2014 at 10:38:07 AM permalink
There is a concept governing all such actions discussed here: diminishing marginal utility. Simply stated, the second, third, etc. ice cream cone, $10 bill, or casino match play coupon isn't as valuable as the first, and the utility of a good (how valuable it is to a given individual) continues to decline as more and more of it is provided.

When someone hedged and thereby diminished their overall EV, that was simply an expression of the diminished utility of the second coupon. To put it another way, not getting $10 would cause more unhappiness than getting an additional $10 would confer added happiness. The dollar amounts would be the same, but pain and pleasure were not.

You might sneer at this and say "It's only $10, so what," but each of us has our own threshold in this regard. If you were handed a million dollars and then given the opportunity to double or lose it on a one-shot bet, you'd refuse even if that bet was strongly in your favor and afforded massive +EV. That's simply because the marginal utility of a second million dollars is much less (for most of us, anyway) than the utility of the first million.
Dieter
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Dieter
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August 29th, 2014 at 10:51:36 AM permalink
Quote: AxiomOfChoice

If you have two coupons it doesn't really matter if we are talking about you having to stick around for one spin or two to play them off.



1 each on Red/Black is a 94% chance of getting the value of 1 coupon, 6% chance of nothing. I might go so far as to throw $5 on green.

1 on Red with two tries is two 47% chances of me getting the value of 1 coupon (53% chance of nothing), and if I manage to make the first one, there's that same chance that the second one will hit (or not), too.

I'll take the bird in the hand, given the opportunity.
May the cards fall in your favor.
AxiomOfChoice
AxiomOfChoice
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August 29th, 2014 at 10:54:26 AM permalink
Quote: Dieter

1 each on Red/Black is a 94% chance of getting the value of 1 coupon, 6% chance of nothing. I might go so far as to throw $5 on green.

1 on Red with two tries is two 47% chances of me getting the value of 1 coupon (53% chance of nothing), and if I manage to make the first one, there's that same chance that the second one will hit (or not), too.

I'll take the bird in the hand, given the opportunity.



Sure, it's the right way to play it (except for that horrible hedge on green).

But it doesn't change the advantage. Moreover, if you get a lot of them (ie, you get some every day) it really doesn't matter.
Dieter
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Dieter
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August 29th, 2014 at 10:56:10 AM permalink
Quote: AxiomOfChoice

Sure, it's the right way to play it (except for that horrible hedge on green).



Would you buy a $50 bill for $2?
May the cards fall in your favor.
AxiomOfChoice
AxiomOfChoice
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August 29th, 2014 at 11:32:33 AM permalink
Quote: Dieter

Would you buy a $50 bill for $2?



Not if I can get one for free more than 4% of the time.
Deucekies
Deucekies
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August 29th, 2014 at 12:33:19 PM permalink
Something to consider, which I don't think has been mentioned yet:

Is there a finite number of free plays produced? These aren't coupons that you can photocopy or print off the internet, are they?

If there is a finite number, then the casino's expected loss is (# coupons) x (EV per coupon), hedging or no hedging. But if an unlimited number of these coupons are available, that changes things considerably.
Casinos are not your friends, they want your money. But so does Disneyland. And there is no chance in hell that you will go to Disneyland and come back with more money than you went with. - AxelWolf and Mickeycrimm
Dieter
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Dieter
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August 29th, 2014 at 1:02:04 PM permalink
Quote: AxiomOfChoice

Not if I can get one for free more than 4% of the time.



Fair enough.

Given the choice between maybe ($200 | $100 | $0), probably ($100), definitely ($94 | $102) ($6 green), people will choose differently.

I, personally, would love to buy $100 bills for $6 a piece.
May the cards fall in your favor.
darkoz
darkoz
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August 30th, 2014 at 6:37:41 PM permalink
Quote: AxiomOfChoice

You're totally missing the point. Each coupon has a certain value. It doesn't matter how it is played. If they all get played, it does not affect the casino's bottom line whether they are played against each other or not.

Your statement that "the advantage is now in my favor" by playing both sides is not correct. The advantage does not change. Any time you play a free bet coupon, you have an advantage.

If somebody is going every day, and they have two coupons every day, they should not care if they can play them against each other or if they have to play one at a time. After a month or two it will all even out and they will have about the same amount of money. The difference between a guaranteed $10/day and two 50% shots at $10 a day is insignificant if you get it for several days. The swings just aren't that big.

In other words, the problem is not about whether the coupons can be played against each other, it's about whether you are giving too many of them out to people who aren't doing any other play.



Okay, I understand what you are saying.

My view of an advantage is not from the mathematical side but the "money in my pocket" side.

I prefer not to gamble. I prefer to walk in and KNOW before I bet that I am going to win.

And playing the coupons against each other with a hedge on green does that.

I don't want to wait till tomorrow or next week for the slings and arrows of variance (and by the way I am a very unlucky person) to make my money. As the girl from Willy Wonka says, "I want it and I want it now!)

Walking into a casino and knowing I am going to walk away a winner EVERY time is an advantage. And yes, its an advantage the casinos quake in their boots over which is precisely why they don't allow betting coupons on both sides.
For Whom the bus tolls; The bus tolls for thee
AxiomOfChoice
AxiomOfChoice
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August 30th, 2014 at 7:41:10 PM permalink
Quote: darkoz

Okay, I understand what you are saying.

My view of an advantage is not from the mathematical side but the "money in my pocket" side.

I prefer not to gamble. I prefer to walk in and KNOW before I bet that I am going to win.

And playing the coupons against each other with a hedge on green does that.

I don't want to wait till tomorrow or next week for the slings and arrows of variance (and by the way I am a very unlucky person) to make my money. As the girl from Willy Wonka says, "I want it and I want it now!)

Walking into a casino and knowing I am going to walk away a winner EVERY time is an advantage. And yes, its an advantage the casinos quake in their boots over which is precisely why they don't allow betting coupons on both sides.



Of course it is better for you to play both sides if you can. The point that you are missing is that it is actually (slightly, insignificantly) better for the casino as well. They don't want to take on variance for free either. They difference is that with their bankroll it doesn't matter too much.

So, no, they are not quaking in their boots over it. In the end it doesn't affect them at all -- they will lose about the same amount with the same number of coupons played.

Of course it's always better to make the lower-variance play. I currently have a play over a single weekend worth over $6000 in EV, but the swings are so massive that I'm not sure I have the bankroll for it. I might have to turn it down. I'm currently (literally, right now) writing code to simulate it and see exactly how big they are, and how much I can reduce them. But make no mistake, whether I can play it in a low variance way or have to play with higher variance, the cost to the casino is the same.
darkoz
darkoz
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August 31st, 2014 at 1:02:46 AM permalink
Quote: AxiomOfChoice

Of course it is better for you to play both sides if you can. The point that you are missing is that it is actually (slightly, insignificantly) better for the casino as well. They don't want to take on variance for free either. They difference is that with their bankroll it doesn't matter too much.

So, no, they are not quaking in their boots over it. In the end it doesn't affect them at all -- they will lose about the same amount with the same number of coupons played.

Of course it's always better to make the lower-variance play. I currently have a play over a single weekend worth over $6000 in EV, but the swings are so massive that I'm not sure I have the bankroll for it. I might have to turn it down. I'm currently (literally, right now) writing code to simulate it and see exactly how big they are, and how much I can reduce them. But make no mistake, whether I can play it in a low variance way or have to play with higher variance, the cost to the casino is the same.



Okay, I will concede that the casino mathematically will lose the same if not less than if they just allowed it.

However I disagree that they don't quake in their boots over it regardless of whether its rational or not.

I once bet a $20 match-play on Player while my friend bet $30 on Banker. Guaranteed profit. Together the two of us had six coupons. The bus rebate was for three apiece. (My actual AP maneuver was something different and I didn't want to "lose" it back due to variance so I chose this small guarantee maneuver).

Normally I would switch seats after each one but this place was packed and it took us half-an-hour to just get two seats at the same table.

On the third go-around, the dealer stated we couldn't bet against each other with the match-play up. We both feigned that we didn't know each other and any person can make any bet they'd like. We hadn't spoken to each other but due to the crowds we had sat down together but either way, the dealer wasn't going to allow it.

We refused to remove our bets so the dealer called security and then shut the table down. BTW - he must have had about four or five hundred bucks in bets up that he said could not be played till we removed our wagers which would have netted us $10 or less.

So we removed them and went over to SIc Bo where we played them anyway.

BUt casinos most certainly do quake in their boots whether its logical for them to do so or not.
For Whom the bus tolls; The bus tolls for thee

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