Poll of the Day > Math people. I have a question.

(+) Yeah! (+)

I want to look more into decision making outcomes. Stats? Idk.

One of the problems Ive had since a kid was some bad decisions would have on average good outcomes. Like a $10000 lottery ticket with typical lottery probabilities where you could win $1000000000000000000000000000000000000000000000000000000000000000000000000 would on average make you money but also be a bad decision to take.

What am I looking for to learn more about things like this? I make a lot of decisions based on calculating the probability of different events and average outcome, but when you look at some extremes this absolutely falls apart.

So dialing it back in, its possible I could make decisions at a level where I does fall apart and be making bad decisions with good average outcomes :/

I guess median outcomes and count each percentile of probability as a data point maybe? But that also doesnt capture the full picture, and a bad median may still be a good decision to take (like if the lottery odds in the above example were 1 in 20).

Welcome to the mathematical world of probability theory

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Game Theory!

Try looking up house edges with Gambling - my favourite being the roulette problem.

Yasee, with the exception of the 0 or 00 space roulette is actually a "perfectly fair" game. The payout odds are nearly equal to the success odds... the only house edge is the result of the 0 or 00 space, which is approximately 5.3%

So, what's the strategy?

None - just play, and avoid the bad bets such as topline (at face value it seems equal, but since 0 or 00 do not count as either odds or evens it's actually a worse bet)

Secondary:
Try to play French/European style roulette since there's only a singular 0 space, which cuts the house edge in half.

Tertiary:
Try to capitalize on local bonuses: Sometimes a casino will offer consolation prizes like dinners/hotel nights for large losses on 0 or 00, so finding out what specials are going on can help.

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That ticket would make you money on average if you had enough money to logistically guarantee it.

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What you're describing is Pascal's mugging.

https://en.wikipedia.org/wiki/Pascal%27s_mugging
https://wiki.lesswrong.com/wiki/Pascal%27s_mugging

Start here, keep reading the related articles.

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ZeldaMutant posted...

What you're describing is Pascal's mugging.

https://en.wikipedia.org/wiki/Pascal%27s_mugging
https://wiki.lesswrong.com/wiki/Pascal%27s_mugging

Start here, keep reading the related articles.

Yep, exactly what I'm looking for. Followed link and found a article about existential events. Pretty interesting.

Lokarin posted...

Game Theory!

I enjoy learning about game theory. I wish you could just study something like academically that but I guess that's just economics or CS and then part of it is game theory.

That's interesting. So some guy in a suit comes up to me in an alleyway and says give me a penny's worth of currency or I'll blow the city up. Its very unlikely that he has the means to do so and it is also unlikely that if he did have the means he would stop for 1 penny. However 1 penny is so insignificant that it would never make sense not to do it.

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