Posted by Richard Reid on August 26, 1997 at 06:40:41: In Reply to: Re: Optimal Betting Question? posted by DvBj on August 26, 1997 at 01:37:02:DvBj:
I guess what I am asking is to make an optimal bet do you have to include information about how accurate your estimate of your expected value is in terms of the quality and quantity of the fraction of total knowledge you have?
Yes. What is being talked about is "Conditional probability."
An easy example to illustrate this with dice would be if you were trying to determine the chance that two sixes would come up on a roll of the dice. Before throwing the dice, there is a 1/6 * 1/6 chance of getting two sixes. However, if you accidently dropped one and saw that it was a six, the probability of getting two sixes is now 1/6.
Probabilities are conditional upon what information you have and your optimal bet will depend upon both the quality and the quantity of that information.
Sincerely,
Richard Reid
- Re: Optimal Betting Question? DvBj 12:29:54 8/28/97 (0)