...except after "C"

No, it's a tax on the poor.

In the movie "Princess Bride" Mandy Patinkin as INDIGO MONTOYA said to Wesley, the Dread Pirate Roberts...Let me 'splain... No, there is too much. Let me sum up...

Thanks to the chocolate coated pill offered by Miracle Max, Wesley was recoving from having life sucked out of him at the Pit Of Dispair, but there wasn't much time because they need to storm the castle to prevent Buttercup from marrying Prince Humperdink.

If there is another movie quote...I missed it...sorry...

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Your analysis of the games is a bit simplistic. You should actually be figuring out what the expectation of a game is before you decide whether or not to play it. In the case of the lottery, it depends on what the prize is, as well as how many other people play. If the prize is 10 million, you have a pretty low long term expectation on your dollar that is only 1 in 146 million to hit. It would be nice if the lottery was a zero sum game once the prize reached 146 million (cash value), however, the winner would still have to pay a large amount of tax on his winnings, so it is still a game with negative expectation. If however you could figure the after-tax winnings to be 146 million, would it then be a zero sum game? Sadly no. There are other players, and you may have to split the prize. What you need to do now is find out how many people are playing, and adjust the odds of 146 million to one (to select a winning ticket), and correct them to reflect the odds of selecting the only winning ticket, which would be somewhat more difficult, as more and more people play (i do not immediately know the math involved in this). Then and only then can you spend your dollar knowing that it was a "good investment", with a positive expectation. It is worth noting that many players claim to get "a dollars worth of enjoyment", out of playing the lottery, and this can make my discussion largely irrelevant.

Concerning your propsed game, it would be necessary to first know the odds of pointing to the word nudge, the exact value of the "couple of dollars", as well as the exact value of possible ruin the losing player faces. Then, it may be possible to calculate the long term expectation of this game. At first glance, this seems like a less fun game to play, given the looming (although small) possibility of absolute financial ruin. If I analyzed this game and found it to have a long term positive expectation for the player, I would still only play it with you if I was allowed to repeat it thousands or millions of times, whatever number would be needed to reach a reasonable statistical "long run". That way I could be reasonable sure that my occaisonal loss would be offset by my many wins.

-J

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I just wanted to follow up on the comments.

First, to Bill: good job picking up on the Princess Bride quote. But you are right, you missed the other one. Sorry, no donut for you this time.

Second, to Jason: while I always applaud the thoroughness of your analysis, I think you've missed the essential spirit of my argument. It is that as the ratio of risk to reward approaches zero, the odds become less significant as a decision factor of whether or not to play powerball or invest in mutual funds.

Please note that it is NOT investing in powerball and playing mutual funds.

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Many games with a small risk and great potential reward still have a negative long term expectation. I dont see how this somehow justifies playing the game. Do you contend that it does?
-J

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No, I merely contend that the justification for playing is not necessarily tied to the odds. We went through this argument with one of your poker posts. Sometimes it's not about the "long-term expectation," but merely about enjoying the game, and with a minimal risk, I don't see the harm in that enjoyment.

On the flip side, when the risk is enormous (like death) and the reward is small (a few seconds of thrill), the relatively miniscule odds of something going wrong (your parachute not opening) may not be that comforting.

I'm saying it's not just about calculating odds. One does not worry about whether the "investment" in a video arcade game has a "positive expectation" - you lose your quarter every stinking time. Sometimes you go all in pre-flop on a deuce-seven off-suit just to see who will go along for the ride.

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I would gladly risk 99 dollars to win one if I knew that my odds of winning were greater than 99%, because then I would have a positive expectation. I would enjoy the game immensly if I could be guaranteed to play it hundreds of thousands of times before settling up. Im not totally disagreeing with you here, Im just saying that I think you are ignoring one half of the risk/reward concept. You have focused on the absolute value of the thing being risked, and the thing being rewarded. I contend that the relative probability of losing something factors into the concept of risk. Sure, in parachuting, one may contend that you are risking something of great value, your life. The risk of death is small, assuming you follow good practices. This I think is atcually part of the thrill, while certainly not comforting, the fact that you are doing something which may result in your death provides an adrenaline rush.

-J

Maybe YOU go all in with 7-2 offsuit!

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"and thats all I have to say about that" is from forrest gump.

-J

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The second quote was
"And that's all I have to say about that."
From Forrest Gump

Dean McCarthy

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wait i missed Jason pointing it out, your Comment board is differently spaced from the others I read. I am not so smart.

Dean

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While I realize that I have not specifically spelled out the rules for winning donuts, I have not awarded a donut yet for this particular thread based on the fact that no single commentor has correctly identified all of the movie quotes in question. At this point, I will also clarify a previously unwritten rule that unless stated otherwise, eligibility for the donut is extended for precisely one week from the date and time of the original post.

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I didnt name the other quote because it had already been named by Bill, that would just be wrong for me to get full credit.

-J

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