2 ms·

> Its wild how the chance of going broke is your money in bet units above both sides money at 50/50 It's actually quite simple. In a fair game you expect to le

• krackers 4y ago
  To be clear, the reason why expected final money is `p * all money` is because the only "absorbing states" are the win state and lose all money state, so it's `p * max money + (1 - p) * 0`, right? Also, it's not quite clear to me why in this case initial money = expected final money. For the related game where you go double-or-nothing on each bet, it's evident this holds since the expected value of your next turn is the same as your current (I believe it's called martingale property), but that doesn't hold for the game in the article where you win +1 or -1 unit each bet, since if you e.g. have 4 units and the win state is 5 units, you're more likely to win than lose. Edit: nevermind, I think it is a martingale since if you're at 4 units the expected value of the next state is 0.5*5 + 0.5*3 = 4. I guess my confusion stemmed from the fact that even though the long-term expected value is unchanged, you can still have good odds of winning (which is balanced by a small chance of a catastrophic loss), e.g. 4 = 0 * 1/5 + 5 * 4/5.