this post was submitted on 24 Oct 2023
17 points (84.0% liked)
Asklemmy
43945 readers
970 users here now
A loosely moderated place to ask open-ended questions
Search asklemmy ๐
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- !lemmy411@lemmy.ca: a community for finding communities
~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
How is this video calculating that a 50% chance of 80% gain and a 50% chance of 50% loss yields a positive expected gain? An alternating string of heads and tails will drive your money to zero - a 50% loss (1/2) would be balanced by a 100% gain (2/1) in a fair system.
This is true if you're betting everything you have. By not having shrinking bets after losses you can tap into the net gains. Compare 1 win followed by 1 loss with $100 start:
Win is $100+$80 = $180
Loss is $180-$90 = $90
Compare with fixed bets of $50 with bank of $100:
Win is $100+$40 = $140
Loss is $140-$25 = $115