One Last Night

[DavidC]

Should you play in a lucrative but high variance game (that you're adequately rolled for), ONE LAST NIGHT before you move, where if you end on a negative swing, you won't be able to recover it from this particularly lucrative game, but will have to instead hammer away at less lucrative games for a long period of time to earn back the money (i.e. two weeks).

For the record, I did play, and it was a month ago, but I'm curious about this from an academic standpoint, in case it happens again.

--Dave.

[Pokey]

A wealthy friend offers you the following deal:

"You flip a fair coin for both of us to see. If it comes up heads, I'll pay you $3. If it comes up tails, you pay me $2."

Do you play?

What if the payouts were $30 for a win and $20 for a loss?
What if they were $300 for a win and $200 for a loss?
How about $3000 for a win and $2000 for a loss?
$30k and $20k?

All of these are good deals for the player who can handle the risk; after all, the expected payout is 1/4 of your bet every time. Where you draw the line and say "that one I'll play, the other one I won't" depends on your personal finances.

You say you're "adequately rolled for" the game...in that case, it shouldn't be an issue. Given that your bankroll is adequate, you should always play the lucrative but high variance game. If you're seriously considering NOT playing, then maybe your bankroll isn't as adequate for the game as you think it is.

[sthief09]

depends what kind of game it is, and your difference in earn at the higher level.

simplifying, say you could either win $3000 or lose $3000 in this lucrative 20/40 game. you have $6000 and want to play 10/20. you'll make $100/hr at 10/20 and make $75/hr at 5/10

if you lose at 10/20 you now have to play another 40 hours of 5/10 to catch up. in that time, you could have made an extra $1000 at 10/20. so the EV of taking the shot and losing is the $3000 you lost, plus $1000 in opportunity cost. the EV of winning is just $3000 plus whatever opportunity cost you gain from getting to move up to 15/30 earlier.