From: James Wetterau (jwjr@panix.com)
Date: Wed Oct 27 1999 - 07:36:10 MDT
Whoops! My apologies (especially to Lee and Clint) for both the
misattribution and the doubled message. That's what I get for jumping
in mid-thread making assumptions about the identities of the
discussants. As to the doubled message, I mistakenly mailed from a
non-list address, anticipated the bounce, and then mailed from my
listed address. It seems both got through, to my surprise.
Lee Daniel Crocker says:
.. (in reply to my saying: )
>> You say you've mastered the laws of probability. That's nice.
>> How do we know they're real laws, not just some idea which has
>> worked out for you?
>
>In what way does "real" matter, except for the money in my pocket?
Well, you may have been lucky until now. If so, the money in your
pocket will have no bearing on the future. The question is: have you
correctly assessed reality? This is the way that "real" matters.
>That's the point I'm trying to make: I don't have to have "faith"
>in physics or math to bet on them and make money. I just have to
>make the bet, and I think it is rational to make the bet, even if
>I have neither "faith" nor "proof". There is a middle ground.
My point was that though I agree that your bet is rational, there is
an odd circularity in back of our understanding of probability.
Your experience seems to show that probability is a useful mental
model (mine does too) but there is a reality behind it. I find it
surprisingly difficult to reason to a non-circular understanding of
the concept of probability, though clearly it works fine.
[Some stuff about EV vs. certainty]...
>Yes, when I played poker for a living, I played a lower-variance game,
>and did indeed sacrifice a bit of EV to prevent catastrophic loss
>(though not by the Kelly criterion, because there are better ways).
>I have a regular 9-to-5 job now, so I play high-variance high-EV poker
...
Poker seems like an interesting game though I've never really examined
it. It seems like it might be the most fun to play of the positive EV
possibilities. But for sheer overwhelming chutzpah, I most enjoyed
the news a few years ago about an Australian consortium that would buy
all the tickets to positive EV American lotteries. The game there was
to find really big payouts due with low participation, assess the
probable number or winners, and enter the lottery quietly so as not to
further drive up participation. The Australians owed no taxes on the
winnings, though by now the American authorities have probably closed
that hole. I relish the idea of someone taking as joyless and
pathetic a "game" as the typical U.S. state lottery and turning it into
a money-making machine for cagey speculators. I learned with sadness
recently that the debate in Australia is now raging about whether to
start taxing gambling.
All the best,
James
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