The Magic Economics of Gambling

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Information The Magic Economics of Gambling

Title	:	The Magic Economics of Gambling
Lasting	:	11.24
Date of publication	:
Views	:	2,8 jt

damn rite
Comment from : Brian Kimmel

100 of $5 vs 80 of $625 makes no sense Why would you EVER expose yourself to variance for zero equity gained? The two options are so far from equal You should have made the second amount $650 so the risk also comes with a small gain
Comment from : AAZFortnite

You aren't talking about how insurance isn't so much a risk-managment service as it is a negotiation service The reason things are so expenive without insurance in America is because everyone has insurance, and if hospitals were to not take insurance, they would be out of business very quickly Insurance will only settle for a 50 discount, so hospitals must charge twice as much for medicine for the uninsuredbrbrIt's a similar economic principle to cashback rewards for merchants Debit card companies control a good chunk of all consumers If buisnesses don't offer to take card, they can loose out on a large pool of customers As a reward for their participation, banks give consumers a tiny percent of what they spend back, and they pay for it in merchant fees This pushes up the price of goods offered in buisnesses that take cards for everyone It's just that those that pay with card get some of that money as cashback, with the remainder going to the bank
Comment from : Emily Soda

This was a good example of why expected values can't be used to order different preferences, generally speaking If you wanna know more about this look up the expected utility function
Comment from : Jens

Disagree with the premise made in the video that to people the 100 chance of getting $5 should be the same as 80 of getting $625 Mathematically yes, but that's on the basis of infinite offerings Put this in the real world and it would be a single offering where the individual could guarantee $5 or gamble with a 1 in 5 chance of losingthats why people take the $5
Comment from : Adam Lowe

people are paying the casinos for entertainment
Comment from : ray-mc-l

There are people going to the casino daily thinking they can make money?brI only go there for fun and expect to pay for that, like any other activity that costs money
Comment from : bluegru

American roullete wheel hard scam
Comment from : Devin

Is it only to me the 100 5 dollars and 80 625 dollar never meant any loss? I just saw it as 2 different possible gains which made the example pretty pointless It never mentioned having to risk anything for the possibility of gaining money
Comment from : Joel Nilsson

Gambling not only will take your money in the long run but it will take you time too Time you could have spent making guaranteed money
Comment from : Joel Barrientos

But 0 is even lol, what?
Comment from : Nachiten Remix

What book maker is paying me out $300 for placing $1 on a 200/1 shot I’ll bet with them
Comment from : Matthew Barry

Insurance works because you gotta pay it to drive and afford hospital bills If you could afford hospital bills out of pocket no one would pay for insurance
Comment from : Karkitty202

Nowadays 1000$ isn’t that much 💀 I choose 100 5$ so I can guarantee a pizza 🍕
Comment from : heex17

Lotteries aren't just a tax, they're a tax on the poor
Comment from : Hans Juker

The 5 dollar and 625 point was flawed in my opinion They don’t have equal value because the question wasn’t “If given infinite choices which would you choose” it was phrased as a one off Meaning you have a 100 chance of profit in one scenario and a 80 chance in another Obviously people would favor the 100
Comment from : Bobin

everything is quite simple I have 5 bucks in my pocket and I’m walking past a casino (an unusual situation) what is five bucks? but there is a 05 chance that I will have 1000 bucks brone way or another, a couple of beers will empty my pocket in the near future brsince I’ve already tried beer, different varieties, I won’t get anything new except slight intoxication but the way to jerk of the fortune's ass is sacredbrThats all
Comment from : Schpyak Schmyak

Multiple statements in this video are WRONG! With how much viewership it got this is harmful
Comment from : Piotrek Martynowicz

The intro makes gamblers look like idiots when really most of you spend money unnecessarily on something like takeout (without the chance to gain money) when its half the cost or less to cook your own food Yet perfectly reasonable people do this every day, much more often than a losing gamble The insurance companies aren't a gambling company either because they raise your rates after an accident That's like gambling in a casino where you win more and more money after a loss to get it back, without having to bet more
Comment from : Vincent Graziano

If you played roulette an infinite amount of times you would leave with $0 And pretty soon I get the point though
Comment from : Perry

That’s why (in my opinion) that “you win some and you lose more” is an old wives tale
Comment from : Oscar Badkin

or conversely when you take a insurance policy you are gambling that you will get into an accident
Comment from : Amanda Smith

i prefer the 05 chance of winning $1000 because in this video i didnt need to spend any money so i have nothing ti loose in the first place so i could try my luck, but if i need to spend $1 i would absolutely pick the 100 chance of getting $5, it doubles my money 5x with 0 risk
Comment from : FaizFS

When the Mafia ran the numbers, which is the same as the state lottery, the odds were better That's why private ones are illegal Government hates competition
Comment from : grant johnson

So many takeaways from this The biggest being bet "chalk"brbrHeavy on the favorites and hedge with the middle and insurance on the longshots
Comment from : cosanostra3530

do you get infinite tries if not take the 5 dollars duh
Comment from : D

Just so you know , 50 doesn't mean that every 2 times you bet will hit once brIt's every time you bet , you have 50 chance of winning, the doesn't affects the next games
Comment from : Aquiline21

Worthless, unless you know ZERO about gambling and odds waste of my time
Comment from : Jason Fisher

I appreciate the main point of your video Have someone double check your facts 6:43 for example This type of inaccuracy can discredit an otherwise logical and reasonable presentation
Comment from : wjmascitello

Insurance companies are basically investment vehicles People wouldn’t buy insurance if they were forced to Health insurance became tied to employment due to the only people buying health insurance prior to this change were the ones who needed it; the ones who would make claims
Comment from : Nick Thompson

What you missed though is, you are always winning what others are loosing So you are enjoying other's loss As long as others were happy to risk their share it is alright but we all know people don't care enough about others but themselves
Comment from : Manohar Singh

5:00 really shitty example
Comment from : Slifer 00

3:00 duh cuz 5 bucks is a more rounded number
Comment from : Slifer 00

1:40 but yeah its a calculated gamble Paying a price to make sure in the small chance that something does happen you are not fucked
Comment from : Slifer 00

In the perfect economic world, communism would work great and we wouldn't need a form of money lol
Comment from : Aarons Analysis

@6:43 the math is incorrect the payout would be $201 dollars return not $300
Comment from : Joseph F

00 is a scam 1 zero is enough house take, with 00 It is still basically the worst table game, with just one zero the house take is about 25 Pokies are the worst with the take at around 10
Comment from : Johnny

Blah
Comment from : sam pittman

Oh my god, Ned Flanders was right!
Comment from : veritas ante omnia

'Small chance to win big' - that's why casino's exist Hoping those walk into a casino with $500, trying to win $2,000+ The ones who win understand that you walk in with $500 and walk out with $550
Comment from : Sam Sam

The more you bet ,the less you lose when you win
Comment from : Steven Mcgee

and also most of them are fixed
Comment from : Will Mason

perfect segue to ergocity
Comment from : Tim Chong

I wish I had £94 for every £100 if spent at roulette!!😂😂
Comment from : diarmuid murray

insurance is a savings account for people with bad spending habits aka most people
Comment from : Nolan Andert

The insurance analogy is dumb af, I know you mention economic shock at 4:13 but that is the MAIN reason
Comment from : Kristian

Gambling is like any other vice In moderation it won't hurt you Taken to extreme it ends up in misery I work in a casino and I gamble on occasion still I am under NO illusion I will win more than I lose I gamble for the entertainment, and because of where I work, I know the way games are and the pitfalls of getting carried away
Comment from : Mark Little

Leave a dislike just because of that stupid comparison of the $5 to $625 What an absolutely biased video Easier to fool someone than to convince them they have been fooled All you do is fool your audience
Comment from : Bloom0to9

The scenario depicted doesnt accurately depict what was being described I think a more accurate scenario is if people are willing to put up $5 with an 80 chance of $625 in return? So 4 out of 5 times they receive the $625
Comment from : Neal Burkard

Sell options people it is way better than gambling
Comment from : Raz Tube

❤❤❤❤
Comment from : Eli Esch

i mean gambling is also fun
Comment from : gilliverererer

"People should have no preference between these two options" (in regards to 100 of $5 and $625 of 80) While that's true from a "raw money returned over time" standpoint (expected value of this specific wager), it doesn't factor in other things - and I guess the question wasn't trying to deep dive, but as someone who faces this sort of situation daily, I'd always prefer the 100 of $5 Why?brbrVolatility When making that wager (not quite the same, but I'm often weighing up the same EV with higher or lower probabilities), if I do the higher probability line I'm likely to have money returned earlier - *that allows me to do things with that money earlier* For one thing, I an abritrage with markets that sometimes require a lot of capital, that I wouldn't be able to do if I was still waiting for my expected value to be realisedbrbrBecause of outside factors, I think it'd be wise for most people to prefer the 100 of $5 Now, I agree if there were no outside factors the answer would be "no preference" - but that exists purely in the realm of thought experiment Now, if it was $100 of $480 and $80 of $625, you have a bona fide question on your hand (for many people it's appropriate to give up some EV in order to decrease volatility, but there are serious questions about what probabilities are still acceptable and how much EV is worthwhile to give up for that reliability)
Comment from : Jaxson Bateman

The conclusions drawn from the 100 chance of $5 vs 80 chance of $625 (2:43) are stupid and flawed or at least misleading This is because the premise - that the two options are worth the same amount - is based on running the scenario an infinite amount of times but of course the individual test subject isn't running it an infinite amount of times, they're running it once So of course they are going to prefer the guaranteed $5 (I'm not arguing the proceeding discussion of people feeling loss more than gain though)
Comment from : Callum Faulkner

This video:brThe lawyer wishes to state that it is leaving as soon as it is timebrNo jealously, the American Win is right here, it just passed
Comment from : Incoming Redacted

As a poker player I will say this Like a lot of things in life, gambling statistically favors the rich Not that you can't grind it out at lower stakes and work up in poker or blackjack, but having a larger bankroll puts you at a significant advantage This is why small bankroll gamblers go broke With a small bankroll you can't handle the swings No matter how good you are
Comment from : byron2521

The favourites for a horse race do not win more often than their odds imply, regardless if you take the best odds available, likewise with tennis Without seeing the methodology of their test, my best guess would be that they are taking the odds at the point that the favourites odds drifted the furthest The problem is that at the time of the bet, you don't know if the odds are going to drift further
Comment from : Carlos Samuel

The odds never change but the probability does For a gambler, its all about getting your money on the right bet I good gambler never bets the same amount on each hand If you loose 6 hands at $10 each but win 4 hands at $20 each, your net is plus 20
Comment from : Joe

Ummmm 200-1 gets you $300 for a dollar??? I’m coming to your casino!
Comment from : Brad Kotzen

Your only problem with your insurance example is that you are the one gambling bc not only do you lose if you don’t have an accident you lose when they don’t pay claims which they can legally get away with
Comment from : ————

I lost interest at the very start unfortunately During the roulette explanation It would not go on forever without 0 or 00, as the odds would be 50 every new game
Comment from : R Mcneil

The 625 is also better because of the variants , like a winning streak
Comment from : The Golden Jackel

6:40 there is a maths error, you receive $201 for each dollar you bet, not $300
Comment from : Lukas Zenick

3:30 what you didn’t realize is that these two options are NOT worth the same amount, as you have only one opportunity to either get 5$ 100 or 6,25$ with an 80 chance brThe second options is worth 5$ you said, when in reality it’s either worth 6,25$ or nothing at all
Comment from : Jannes Justus

Lottery, a tax on the people who are bad at math, with the proceeds going to make people bot bad at math
Comment from : Gehrtz

This clip perfectly explains crypto
Comment from : DBKarel

One facet of gambling that you might have placed more emphasis on is the fact that often the 5 probability of winning 200x the bet is never achieved by a gambler who may become dejected and "cut" their losses This accounts (in part) for a casino's profitability
Comment from : Tyler Nevins

6:10 This does not prove that humans like low probability risk, although it can be an exciting experience this is not the reason for the results of that experiment, the reason is that people see 5 dollars as a meaningless amount of money compared to 1000 dollars, that means that they probably hate the 5 probability but it is the only option that promises a reward to them unlike the guaranteed 5 dollars
Comment from : Right Hand Man

European roulette has only 1 zero😂😂😂😂
Comment from : Mister X

If I ever become a leader where I live, I will ban all forms of gambling to save families and lives Casinos are the home address of satan
Comment from : Ãl-Sultan آل-سلطان Mint

Gambling it's a mug's game
Comment from : sajmeister

Gamble is death penalty
Comment from : John brookhaven

Gambling should honestly be banned
Comment from : Vinodh Cashout

Your examples make no sense why would anyone want the additional volatility of two bets with the same ev when they don’t have infinite trials
Comment from : Phlegethon

But you DON’T get to play the 80 chance of $625 “infinite times” That’s why your comparison is a bit absurdbrbr06:10 Again, 05 chance of $1000 is NOT the same amount as 100 of $5, YOU DO NOT GET TO PLAY INFINITE TIMES
Comment from : zandaz3

Your premise fails in the first minute Gambling customers pay for entertainment value; I might pay to see a movie, I don’t expect the theater to give me 100 of my money back Why would the casino give you all your money back after entertaining you?
Comment from : glenn alexon

Make the 5 dollars 500,000 and all the other values also multiplied by 100,000 and people will think very carefully about this question
Comment from : Julian Downey

Gamble Rap:
Comment from : DumpDumbDummy

In my opinion casino gambling is a fraud A slot machine is programmed to pay out after consuming hundreds or thousands of dollars The only ones gambling are the bettors against eachother Give it to charity and you'll get a nice warm glow ☮️
Comment from : Spoiler Alert

Well now we know how our lives will end
Comment from : Т1000 Youtube

Great video very informative
Comment from : Abdul F

Yeah but I have a system
Comment from : TheYodg

Where is hidden dollar pounds
Comment from : Aiub wahed

my gambling ass wanted the 80 💀
Comment from : qwivit

Dear Sir › $5 is good price
Comment from : Mrjakir hosen Ronny Ronny

Many people have trouble thinking abstractly, so they just can't comprehend probabilities
Comment from : Lynda Korner

But insurance spreads the catastrophic risk among millions of policy holders People are willing to lose a little (premiums) to avoid losing their homes, life savings, etcbrbrGamblers, on the other hand, are not investors Science has shown that dopamine in addicted gamblers goes up when? Not when the outcome is revealed, or when the payoff is made No It shoots up when the bet is placed! THAT's what casinos are selling
Comment from : Rich Douglas

By the way, do casino resort owners run their businesses like cruise shops or amusement parks (keep the customers inside their business long enough to drain their $$$)?
Comment from : inferno0020

10:17 all forms of gambling are set up in a that theyre guaranteed to make money UNLESS BLACKJACK BECAUSE YOU CAN COUNT CARDS AND BEAT THE ODDS
Comment from : troltristan