Take the 2-minute tour ×
Mathematics Stack Exchange is a question and answer site for people studying math at any level and professionals in related fields. It's 100% free, no registration required.

If given the cost to play, and the average win. Can I calculate the edge? (probability of winning)

share|improve this question
1  
I don't think this question is appropriate for this site. –  BBischof Aug 16 '10 at 18:52
1  
Indeed it might get better answers at stats.stackexchange.com –  Justin L. Aug 16 '10 at 19:00

1 Answer 1

It should intuitively feel like it's not (theoretically) possible -- the cost to play and the average win are determined by a bookie (or a casino, etc.), whereas the probability of winning is determined by the game itself. Given two games, one with a probability of winning $p_1$ and the other with a probability of winning $p_2$, the bookie can adjust the returns on bets so as the cost of play and average win remain constant. For example:

  • Consider a tossing coin game, the player bets 1 dollar, if the coin is "heads" it will return 2 dollars and if "tales" then there is no return. So the expected win is +1-1=0.

  • Now consider a die rolling game, where the player bets 1 dollar, if the die rolls 6, then 6 dollars are returned, otherwise there is no return. Here the expected win is +5-1-1-1-1-1=0.

In both cases the cost to play is 1 dollar and in both cases the expected win is 0, but the probability of winning is different (1/2 vs. 1/6).

In practice, however, you might be able to infer an approximate probability of winning based on past experiences of the bookie, familiarity with the game being played, etc.

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.