Gambling problem that started the modern probability theory

The theory of probability in the ancient days used to be considered witchcraft or magic (what wasn't?). But nothing drives mankind like the motivation to win money easily and quickly! When you study probability, you often hear some gambling related terms (e.g., Monte Carlo simulation). See if you can figure out whether these games have positive EV:

Game #1: Betting with even odds on getting at least one six on four rolls of a fair die.

Game #2: Betting with even odds on getting at least a double six on 24 rolls of a pair of dice.


Source and answers here:

http://introductorystats.wordpress.com/2010/11/12/one-gambling-problem-that-launched-modern-probability-theory/

I also learned today that Dutch people really like to gamble and it lead to the development of the futures marekt in the 17th century. Instead of buying tulips as commodities, they started betting/buying what tulip harvest will bring in for the upcoming year.

Quote: debitncredit

I also learned today that Dutch people really like to gamble and it lead to the development of the futures marekt in the 17th century. Instead of buying tulips as commodities, they started betting/buying what tulip harvest will bring in for the upcoming year.

Most people would point out that the Japanese invented the "futures market" as the first true futures market was the Dojima Rice Exchange in Osaka, Japan. The tulip mania may have been futures contracts, but there wasn't an established market per se.

Quote: debitncredit

Source and answers here: http://introductorystats.wordpress.com/2010/11/12/one-gambling-problem-that-launched-modern-probability-theory/

Gerolamo Cardano, an Italian mathematician and gambler who was friends with Leonardo DaVinci had written a book on gambling in 1523, but it wasn't published for another 150 years.


Cardano died 40 years before Chevelier de Mere was born.


Cardano's is the name of an risk management firm today.

I'm not buying the idea that a mathematical look at gambling awaited even the time of Da Vinci. Which is not to say things were published or that historians would know in any other way.

I've heard this story as well, but I have to wonder about it because I know hazard dates back at least to the Canterbury Tales, and how could one devise such a game as hazard without knowing what escaped the Chevalier? Certainly Pascal's contributions to probability theory were massive, however. You don't get credit for figuring out what's only published after everyone already knew, Nostradamus.

Although "witchcraft or magic" certainly sounds like typical sola scriptura-thumping Enlightenment historiography. At least, although it doesn't survive, Claudius is on record as having written a book on dice.

It is worth pointing out that engineers knew long before philosophers that projectiles flew in parabolas, although it took the philosophers to calculate them precisely.