Fair deal when holding separate number of tickets to casino lottery
January 21st, 2025 at 11:57:06 AM
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I'm curious what folks here think is a fair way to make a deal, if you have 3 parties:
Player 1 has N tickets. Simple numbers: 6 tickets.
Player 2 has N/3 tickets.Simple numbers: 2 tickets.
Player 3 has N/6 tickets. Simple numbers: 1 ticket.
Party2 and Party3 are together and basically share bankroll/whatever.
Lottery format:
* 5 drawings total.
* Any person can win at most one time.
* Price for being drawn: $1,000. (use simple round numbers)
* In the interest of avoiding "it practically doesn't matter because there might be so many tickets repeat wins are unlikely, consider a situation where the 3 parties above together hold more than 30% of all tickets.
Player 1 and Players 2/3 want to make a FAIR deal that REDUCES variance.
Player 1 having twice as many tickets as player1+2 obviously gives them an advantage in terms of EV.
Players 2 and 3 being able to be drawn twice has additional value too compared to just holding them as a single person.
I asked ChatGPT to think about this and even the slightly simpler version (2 parties instead of 3) actually opened my eyes to the complexity of such calculations. Feel free to review, but I encourage you to think about it before looking here
https://chatgpt.com/share/678ffb16-5894-800b-b8ab-57a50261682b
How would you structure a FAIR deal? Ignore impacts of tax complexities and counterparty trust.
Player 1 has N tickets. Simple numbers: 6 tickets.
Player 2 has N/3 tickets.Simple numbers: 2 tickets.
Player 3 has N/6 tickets. Simple numbers: 1 ticket.
Party2 and Party3 are together and basically share bankroll/whatever.
Lottery format:
* 5 drawings total.
* Any person can win at most one time.
* Price for being drawn: $1,000. (use simple round numbers)
* In the interest of avoiding "it practically doesn't matter because there might be so many tickets repeat wins are unlikely, consider a situation where the 3 parties above together hold more than 30% of all tickets.
Player 1 and Players 2/3 want to make a FAIR deal that REDUCES variance.
Player 1 having twice as many tickets as player1+2 obviously gives them an advantage in terms of EV.
Players 2 and 3 being able to be drawn twice has additional value too compared to just holding them as a single person.
I asked ChatGPT to think about this and even the slightly simpler version (2 parties instead of 3) actually opened my eyes to the complexity of such calculations. Feel free to review, but I encourage you to think about it before looking here
https://chatgpt.com/share/678ffb16-5894-800b-b8ab-57a50261682b
How would you structure a FAIR deal? Ignore impacts of tax complexities and counterparty trust.
Last edited by: Mukke on Jan 21, 2025
