Delete

[jingramm]

Should have phrased the question correctly

 

[Atomic Playboy]

How many coin flips does the 2:1 payout apply to? Only the first? If it was an infinite number, I'd bet smaller amounts; say around $5,000. Given the 2:1 payout on an even 50:50 odds event, I'd eventually come out on top by quite a bit. But if I only got one flip at those odds, I'd probably wager $10,000 since I still would have a significant cushion should I lose.

If you're looking for the math behind the probability, I can't help you.

 

[SMOGZINN]

What am I betting on?

EDIT: By the way you wrote it I would bet nothing. That would be the only way I could actually pay you the 50,000 if it comes up heads.

 

[rcpratt]

Post makes no sense, but I'm assuming we have 50k and choose to bet any amount of that with a 2:1 payout.

If we could do it indefinitely it would be a stupid question, so I'll assume it's a one time thing. In my current situation, I'd bet 35k.

 

[ViviTheMage]

/puke

 

[RSaylors]

It is a function of the marginal utility of 50,000 to the individual making the bet.

Actually coming up with 50k to pay you would be do-able, for me, but would mean giving up on my Ph.D. program. For others it would mean losing the kids collage fund, for others it would mean selling off the boat or camper. The marginal utility/dis-utility of 100k is similarly situation dependent.

john nash and his econometric analysis leads to wrong answers because people, while motivated by incentives, rarely have the same level of motivation from a given incentive. Your professor wants 100% because it's the right behavior for a "rational agent".

 

[SlitheryDee]

Seems that I've already bet 50k, double or nothing.

 

[twinrider1]

X = 100%

 

[darkxshade]

Let's say you have a fair coin with 50/50 chance of being heads or tails. You have 50,000 in your bank account.

If it lands heads, you give me 50,000. If it lands tails, I give you 100,000.

How much percentage of your bank account would you bet?

What does it matter how much I bet if I have to give you 50k if I lose?

 

[brblx]

there is no extra dollar

 

[Greenman]

Can I hold the money while you gents work out the details?

 

[eits]

what's it matter how much i bet if i'm gonna lose $50,000 if you win?

0%... happy with my $50,000.

 

[Craig234]

Why is this being asked, since it pretty much never happens that you get those kinds of odds, unless you're on Wall Street?

 

[Schfifty Five]

Let's say you have a fair coin with 50/50 chance of being heads or tails. You have 50,000 in your bank account.

If it lands heads, you give me 50,000. If it lands tails, I give you 100,000.

How much percentage of your bank account would you bet?

Are you mentally retarded? I think you are.

 

[brblx]

Are you mentally retarded? I think you are.

post could have been summarized as:

topic: hay guys
thread: 50/50 shot at double/nothing yes/no?!

 

[Juked07]

This was horribly worded. I think it's clear the OP means this (and if not, I can't imagine any other sensible question that fits):

Given the opportunity to pay X dollars to flip a fair coin, where the payout is 3X or 0, how much would you pay?

X of course is a function of a person's utility for money (risk aversion). The expectancy of this bet is incredible. No, Craig, you don't see that much edge "on Wall Street" almost ever. In any case, for reasonable utility curves, we should bet a significant fraction of our wealth. The Kelly bet for instance (http://en.wikipedia.org/wiki/Kelly_criterion) is 25% of wealth.

 

[RSaylors]

post could have been summarized as:

topic: hay guys
thread: 50/50 shot at double/nothing yes/no?!

Actually the summary should have been:

What % of your bank account is 50k?

 

[Binarycow]

Actually the summary should have been:

What % of your bank account is 50k?

it's about 0.278% and that's just checking. It's getting tedious every month keeping track of all the digits in the balance amount.