4 ms·
If you just want to maximise the average amount of money that you end up with then you should bet your entire fortune every day. Of course you will be bankrupt
by OscarCunningham 8y ago
If you just want to maximise the average amount of money that you end up with then you should bet your entire fortune every day. Of course you will be bankrupt if you ever lose your bet, which is very likely over the course of 50 years. But in the ridiculously unlikely event that you won every bet your fortune would be even more ridiculously large. So the average amount of money would be very large, even though you would very probably be bankrupt.
- n4r9 8y agoI see. What if I wanted to maximise the expected profit, given that the chance of bankruptcy should not exceed 1%? Does that sort of problem become difficult to solve?
- OscarCunningham 8y agoJust always keep a cent in reserve. Then you can never go bankrupt and your average winnings are barely affected.
- n4r9 8y agoThat's a good point. Sorry for the late reply (don't know if you'll see this!) but I happened to be thinking about this again and the question popped into my head: what if I wanted to maximise a specific percentile (e.g. the 5th percentile) of my total winnings?
- sesqu 8y agoFixing the percentile seems akin to the gambler's fallacy: since losses below a certain point don't matter, you just have to bet everything when you fall off, like you would if you thought after a big loss streak you were "owed" a win.