Thought experiment: Flip a Coin.

[Deldavala]

Casinos come out ahead on this because the wheel isnt just red and black. It has 2 green spaces in order to tilt the odds slightly in the houses favor.

I love that he is so sure that his math is better, even calling out people for bad fiscal understanding, when he is in fact in the wrong.

[Zogarth]

I would first ask to postpone the bet for a bit, and then proceed to sacrifice 9 goats to the glorious blood god, and pray for his favour upon my wager. Then I would flip the coin. Gotta increase those odds.

[Deldavala]

Except I'm not.

What your premise is that, if you take the 1k and gamble you will get 2k if you win on a colour in roulette, which has less than 50% chance of happening

The thing is that, we are not betting 1k in this experiment, we are betting 500 for a 500 gain at 50% making it better than roulette.

[XDurionX]

If you put a dollar on red and win, you'll get 2 dollars back at 99% of casinos. I don't know what crappy casinos you've been frequenting, but I suggest you don't return.



Agreed. It's still a lot better than a 50% shot at a 50% return.

.

The expectancy value in OPs gamble is exactly 0. You won't get this in any commercial gambling, otherwise the house would be bankrupt soon. The expectancy value is ALWAYS negative.

[Puri]

Add a zero to the amount and I might start thinking about it. $500 or $1500 is so little money - in the grand scheme of things - I wouldn't know what I'd do with it that I wouldn't be able to afford right now.

[Aitch]

OP didn't originally have the line "take half of it and gamble on a coin toss". So I had to assume that he meant to gamble the 1000$ for a chance at 1500$. I guess he changed it after my original post.

[Deldavala]

Oh, a nice shame delete when realizing he is wrong.

Anyways, as a gambler this is about the most fair odds you can expect in any given gamble. Makes it a little less fun though.

- - - Updated - - -

OP didn't originally have the line "take half of it and gamble on a coin toss". So I had to assume that he meant to gamble the 1000$ for a chance at 1500$. I guess he changed it after my original post.

He did though, its even in the options you can choose.

[Ghostpanther]

Take the 1000 and walk away. No need to think about which choice.

[Doctor Amadeus]

Take the 1000 and walk away. No need to think about which choice.

Steak dinner for you that night eh LOL!

[oleander89]

Just take the $1000

It's not a huge difference either way. The expected value of each choice is exactly the same, but taking the $1000 is less variance.

[Phookah]

The fact that 27.27% of poll respondents so far would take a gamble with odds that are twice as low as would you could get by walking into any casino is depressingly telling about the state of average fiscal understanding.

Or you know, you could actually apply logic to the concept that you just found money and no matter what happens, you end up a minimum of $500 richer that day.
Money that isn't earned or expected has less intrinsic value to some people, it's not hard to understand. Not to mention your math was wrong in the first place.

[Aitch]

Yes, he did originally have that. It also doesn't change the fact that the chance at winning roulette on red or black is less than 50% like you seem to think.

You must feel pretty embarrassed.

A little embarrassed yes.

I take some solace in knowing that only the mistakes of smart people trigger that smug self-satisfaction.

Nobody cares when a fool errs.

[Doctor Amadeus]

- No.

- I chose the $1000 because I don’t like to gamble.

Yeah but $1500 think of something real nice you can get for that, maybe a down payment on that tennis bracelet you had your eye on, steak dinner night at the best restaurant in town with your family, maybe some art supplies

$1000 for $1500

[Zeemag]

Grew up with middle-low income.

I'd keep the $1,000. A 50% chance is much too risky, those odds are not in my favor. I wouldn't feel comfortable gambling until my chance of success was at least 80%.

[Aitch]

Did you just call yourself smart? No one would have given a damn if you weren't so adamant about being correct when you were so clearly wrong.

Sure, you were right, I was wrong. Are you capable of moving on?

Back to the topic, if the question is a 50% shot at a 100% payout I would take the gamble every time for any amount.

Since the average chance of a profit or a loss is 0% from the gamble itself i’d consider the future earning potential of the payout. Comparing the compounding interest on 1500$ with the same compounding interest on 500$ gives a non-zero profit probability to taking the bet.

[WintersLegion]

What your premise is that, if you take the 1k and gamble you will get 2k if you win on a colour in roulette, which has less than 50% chance of happening

The thing is that, we are not betting 1k in this experiment, we are betting 500 for a 500 gain at 50% making it better than roulette.

Plus it's not 1k of your own money it's money you were given meaning it's extra so whether you win or lose the gamble you still come out ahead by at least $500.

[roxfm]

Since the gamble payout is exactly the same as the probability, I'll take my 1k. If it was even "bet $500 for a $1100 payout", I'd gamble.

The return isn't there since it's a coin flip.

[zlygork]

Keep 1000$. Cuz statistics, and it's still 1000 extra $

[Zython]

So if I'm understanding this correctly, the outcomes are:

A. Leave and take $1000
B. Flip a coin, lose, and take $500
C: Flip a coin, win, and take $1500

Assuming my understanding is correct, the gamble has an expected value of (500)*0.5 + (1500)*0.5 = 250 + 750 = 1000. So both options are technically equal. I'd say take the $1000 as a sure thing.

[Trifle]

The expectancy value in OPs gamble is exactly 0. You won't get this in any commercial gambling, otherwise the house would be bankrupt soon. The expectancy value is ALWAYS negative.

Black Jack is the best game to play in a casino. Played normally, the house has a very small edge. If you use a card counting system, the player has the edge in the long run (this is because the player can dynamically adjust his strategy according to what's likelier to come out of the deck, whereas the casino has a static strategy that never changes). Note that if they suspect you of this, they'll probably ask you to stop for the night, and/or ask you not to come back.

eg.
"When Atlantic City first opened the casinos could not ask card counters to leave and entire tables were filled with people jumping suddenly from a $5 bet to $300, or whatever the minimums and maximums were. After taking a huge beating, the Atlantic City casinos begged the gaming authorities for a change in the rules, which they got."