Lecture 4(3)

Lecture 4(3) - Vegas Baby A trip to Vegas is just a sample...

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Unformatted text preview: Vegas Baby A trip to Vegas is just a sample of a random variable (i.e. card games, slot machines or video poker) Which is more likely: Win on a short trip Win on a long trip Vegas Baby Longer trip is larger sample more likely to get closer to expected value which is LOSING (with some notable exceptions) House likely to win in the long run, but loses in the short run all the time. Player likely to lose in the long run, but wins in the short run all the time Example: Blackjack What is you went to Vegas every weekend for 20 years (1000 trips) and played exactly 8 hands? How often would you win all 8 hands? How often would you win 6 out of 8 hands? How often would you lose all 8 hands? Example: Blackjack The outcomes of each trip would be on a distribution. This distribution would be affected by: Luck The distribution of each blackjack event (e.g. the score distribution) Good player Distribution ___ ___ Bad player Distribution ___ ___ Example: Blackjack Winning or losing in the short run is greatly affected by LUCK Example: Blackjack What is you went to Vegas every weekend for 20 years (1000 trips) and played exactly 256 hands? How often would you win? How often would you lose? Good player Bad player One hand ___ ___ ___ ___ Good player Bad player 256 hands Example: Blackjack Winning or losing in the long run is greatly affected by distribution mean (which in this case is determined by skill in blackjack) Flipping out Very important concept. Very important concept....
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Lecture 4(3) - Vegas Baby A trip to Vegas is just a sample...

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