= 27d567bc2d48d9f40e9ccc20ea370b15)
Douglas_Knight comments on Open Thread: June 2010 - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (651)
Citation please? A cursory search suggests that machines go through +EV phases, just like blackjack, but that individual machines are -EV. It's not just that they expect people to plow the money back in, but that pros have to wait for fish to plow money in to get to the +EV situation.
The difference with blackjack is that you can (in theory) adjust your bet to take advantage of the different phases of blackjack. Your first sentence seems to match Roland's comment about the Kelly criterion (you lose betting against snake eyes if you bet your whole bankroll every time), but that doesn't make sense with fixed-bet slots. There, if it made sense to make the first bet, it makes sense to continuing betting after a jackpot.
This comes up frequently in gambling and statistics circles. "Citation please" is the correct response - casinos do NOT expect to make a profit by offering losing (for them) bets and letting "gambler's ruin" pay them off. It just doesn't work that way.
The fact that a +moneyEV bet can be -utilityEV for a gambler does NOT imply that a -moneyEV bet can be +utilityEV for the casino. It's -utility for both participants.
The only reason casinos offer such bets ever is for promotional reasons, and they hope to make the money back on different wagers the gambler will make while there.
The Kelly calculations work just fine for all these bets - for cyclic bets, it ends up you should bet 0 when -EV. When +EV, bet some fraction of your bankroll that maximizes mean-log-outcome for each wager.
Some casinos advertise that they have slots with "up to" a 101% rate of return. Good luck finding the one machine in the casino that actually has a positive EV, though!
On the scale from "saw it in The Da Vinci Code" to "saw it in Nature", I'd have to say all I have is an anecdote from a respectable blogger:
I'll give you that "many" is almost certainly flat wrong, on reflection, but such machines are (were?) probably out there.
The only relevant part of the quote seems to be:
I'm pretty sure it's not that unlikely to come up ahead 'three or four' times when playing slot machines (if it weren't so late I'd actually do the sums). It seems much more plausible that the blog author was just lucky than that the machines were actually set to regularly pay out positive amounts.
That move was full of falsehoods. For example, people named Silas are actually no more or less likely than the general population to be tall homicidal albino monks -- but you wouldn't guess that from seeing the movie, now, would you?
That's why it represents the bottom end of my "source-reliability" scale.