3 ms·
No, the trick is less obvious. It's even more shocking that a hugely higher expectedly value upside (+100% , -60%) ((2x+.4x)/2 = 1.2x) is still losing long-term
by hgsgm 3y ago
No, the trick is less obvious. It's even more shocking that a hugely higher expectedly value upside (+100% , -60%) ((2x+.4x)/2 = 1.2x) is still losing long-term.
- kgwgk 3y agoYou think that anyone would be shocked with (+100%, -75%) if you put it in terms of "heads you double your amount, tails you halve it twice"? It would be kind-of obvious that if you play a sequence of games you need two heads for each tails just to break even. (If you're lucky and get a streak of heads you can win big though.)
- cubefox 3y agoWe need the geometric expectation here: sqrt(2x * .4x)=0.89x The arithmetic expectation is wrong in this case.