debitncredit
debitncredit
Joined: Jul 4, 2012
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December 23rd, 2012 at 2:13:22 PM permalink
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/
debitncredit
debitncredit
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December 23rd, 2012 at 8:37:09 PM permalink
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.
Ardent1
Ardent1
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December 23rd, 2012 at 11:29:35 PM permalink
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.
pacomartin
pacomartin
Joined: Jan 14, 2010
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December 26th, 2012 at 12:49:43 AM permalink
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.
odiousgambit
odiousgambit 
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December 26th, 2012 at 1:00:49 AM permalink
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.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
24Bingo
24Bingo
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December 26th, 2012 at 4:51:39 AM permalink
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.
The trick to poker is learning not to beat yourself up for your mistakes too much, and certainly not too little, but just the right amount.

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