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Try it with a larger population and a smaller number of rounds. It turns out the mean gain actually is positive, but the median gain is negative.
by jstanley 3y ago
Try it with a larger population and a smaller number of rounds. It turns out the mean gain actually is positive, but the median gain is negative.
- nhinck 3y agoThe claim was: "Each round, the collective wealth goes up 5%, no matter how many rounds you run. " And this isn't true.
- kgwgk 3y agoDo you mean that it's not true that "in one round, the collective wealth goes up 5%"? I could agree with that. (However, if you add "in expectation" it will be true for one round and for each round no matter how many rounds you run.)
- nhinck 3y agoFor a finite population and starting wealth, the collective wealth will tend to 0 given enough rounds.
- kgwgk 3y agoSo you say that it's false that "in one round, the collective wealth goes up 5%", right? However you agree that it's true that "in one round, the collective wealth goes up 5% in expectation", right? (I agree that "for a finite population and starting wealth, the collective wealth will tend to 0 given enough rounds ALMOST SURELY". The last bit is important though. Otherwise it's like saying that if you flip a coin enough times you will get heads - which is not exactly true.)
- nhinck 3y agoYeah I would say "in one round, the collective wealth goes up 5% in expectation" but "for a finite population and starting wealth, the collective wealth will tend to 0 given enough rounds" not almost, but absolutely.
- kgwgk 3y agoMaybe you're not aware but almost surely is a technical term - which makes the statement correct. Just like you cannot be absolutely certain to get heads if you flip a coin enough times even though it will happen almost surely.
- kybernetikos 3y agoI think that the effect is from the fact that you're sampling from all possible outcome history paths. To realise the positive expected value, your sample needs to include some of the increasingly rare possibilities where you gain enormously. This means that if your population is large compared to the number of branches (2^rounds) then you probably do sample that and the overall gain is positive. If your number of branches is large compared to your population, you probably don't sample the branches where you make lots of money, and your overall gain is negative.