Researchers Create a Statistical Guide To Gambling 185
New submitter yukiloo writes "An early Christmas treat for the ordinary Joe who is stuck with a Christmas list that he cannot afford and is running out of time comes from two mathematicians (Evangelos Georgiadis, MIT, and Doron Zeilberger, Rutgers) and a computer scientist (Shalosh B. Ekhad). In their paper 'How to gamble if you're in a hurry,' they present algorithmic strategies and reclaim the world of gambling, which they say has up till recently flourished on the continuous Kolmogorov paradigm by some sugary discrete code that could make us hopefully richer, if not wiser. It's interesting since their work applies an advanced version of what seems to be the Kelly criterion."
Do you even bother to edit submissions anymore? (Score:5, Interesting)
Half this submission makes no sense, grammatically or otherwise.
Well.... (Score:5, Interesting)
The news story posted on Slashdot not that long ago on a casino successfully suing a gambler of all his winnings because the machine's system for preventing you from winning wasn't working tells me that the only paradigm in use is "give us your money... or else!"
Conclusions (Score:5, Interesting)
The three authors completely agree on the mathematics, but they have somewhat different views about the
significance of this project. Here they are.
Evangelos Georgiadis’ Conclusion
We provided a playful yet algorithmic glimpse to a field that has up till recently flourished on the Kolmogorov,
measure-theoretic paradigm [as evidenced by the work of Dubins and Savage [4] (see [7] for more recent
developments]. The advent and omnipresence of computers, however, ushered an era of symbol crunching
and number crunching, where a few lines of code can give rise to powerful algorithms. And it is the ouput
of algorithms that usually provides insight (and inspiration) for conjectures and theorems. Those, in turn,
can then be proven in their respective measure-theoretic settings. Additionally, a computational approach
lends itself easily to more complex scenarios that would otherwise be considered pathological phenomena
(and would be fiendishly time-consuming to prove – even for immortals like Kolmogorov and von Neumann).
Doron Zeilberger’s Conclusion
Traditional mathematicians like Dubins and Savage use traditional proof-based mathematics, and also work
in the framework of continuous probability theory using the pernicious Kolmogorov, measure-theoretic, par-
adigm. This approach was fine when we didn’t have computers, but we can do so much more with both
symbol-crunching and number-crunching, in addition to naive simulation, and develop algorithms and write
software, that ultimately is a much more useful (and rewarding) activity than “proving” yet-another-theorem
in an artificial and fictional continuous, measure-theoretic, world, that is furthermore utterly boring.
Shalosh B. Ekhad’s Conclusion
These humans, they are so emotional! That’s why they never went very far.
Comment removed (Score:5, Interesting)
Note about Ekhad (Score:5, Interesting)
Shalosh B. Ekhad (Score:5, Interesting)
Re:Well.... (Score:3, Interesting)
The smart ones go work in the fancy financial industry.
That's the way to legally cheat, consistently make a profit, and not have your bones broken.
http://www.nytimes.com/2009/07/24/business/24trading.html?_r=1 [nytimes.com]
http://www.nytimes.com/imagepages/2009/07/24/business/0724-webBIZ-trading.ready.html [nytimes.com]
And the betting limits are really high.
Re:Conclusion (Score:5, Interesting)
You don't have to be bad at math to play the lottery. A buck for a ticket is a small price to pay for the entertainment you get when the numbers come up. Especially if your friends play, it can be a social event when the numbers are announced.
Well, honestly, you play correctly. If you're not actually expecting to win, but you find some entertainment in sitting there with your friends waiting for the numbers to come up, more power to you. I don't think you represent the majority, though. I think most of the people playing the lottery are people who spend money that they could actually use for more practical things, in the hope of moving up from poverty. I don't have numbers to back this feeling up, but I do see those local news stories every time the jackpot goes up into the $200 million range with poor schmoes buying hundreds of dollars worth of tickets. Congratulations, dude: you just increased your odds of winning from nearly impossible to still nearly impossible.
The above is not an argument against the lottery, btw. I don't think the government should be in the business of protecting people from their own bad decisions. It is, however, an argument for better public education. People would make less bad decisions if they had the tools to analyze a situation better.
Re:Conclusion (Score:4, Interesting)
Reminds me of a successful scam I read about, from back in the late 1950s or thereabouts. They put an ad in the classifieds of many papers, saying simply "Send your dollars to GEB, PO BOX 123". Lots of people thought this was some charity and sent money. The Postal Inspectors (US Postal Service police) came after the guy, charging him with mail fraud. His successful defense was that he made no promises, only asked people for money.
AFAIK this particular trick was quashed in the future, as newspapers refused to take ads like that.
Continuous vs Discrete (Score:3, Interesting)
Re:Do you even bother to edit submissions anymore? (Score:4, Interesting)
I find anything related to the Kelly Criterion interesting. It made me a rich guy :-)
To clarify, try this experiment: sit down with a group of friends and pretend you all have 100 dollars. Ask everybody what their stake will be for the following game: you throw a coin and if it ends up heads, everybody gets 1.5 times his stake, plus the initial stake returned. Tails means the stake is lost. First of all: this game has a positive expectancy so you should play. But the question of how much you should bet is an interesting one. It is easy to see why: bet nothing and you will not profit. Bet everything and sooner or later you will be wiped out. Try the game with a couple of friends who haven't heard of Kelly and chances are everybody has lost his stake in a couple of rounds.
Once you find a profitable strategy that works, and scales to large large amounts, Kelly is really useful to know.
Mark