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#11
10-08-2005, 12:00 AM
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Re: Wealth creation in zero sum games
[ QUOTE ]
In a zero sum game like poker, everyone who plays is on average a net loser, due to the rake. [/ QUOTE ] Poker is a zero sum game because the Poker room rake counts as a player... 5 players sit down to play...at the end of the night... As + Bs + Cs + Ds + Es = Ae + Be + Ce + De + Ee + Rake s=starting $ e=ending $ The system (playing poker) neither created nor destroyed any $, it just shuffled the wealth around! This is not the case in the stock market. 
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#12
10-08-2005, 02:14 AM
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Re: Wealth creation in zero sum games
Completely different. Poker is a game with limited number of players. Chips. Etc. Narrowly defined universe.
New companies can be added to stock market. And amount of money that can be invested in U.S. stock market by Americans and foreigners incredibly large. And amount of natural resources that corporations can acquire and sell is so large and can expand. Stock market is only limited in the philosophical sense that total amount of matter in the universe is finite. But that is so theoretical as to be almost meaningless.
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#13
10-08-2005, 03:50 PM
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Re: Wealth creation in zero sum games
[ QUOTE ]
Poker is a zero sum game because the Poker room rake counts as a player... 5 players sit down to play...at the end of the night... As + Bs + Cs + Ds + Es = Ae + Be + Ce + De + Ee + Rake s=starting $ e=ending $ [/ QUOTE ] [ QUOTE ] Note that one can more easily analyse a zero-sum game; and it turns out that one can transform any game into a zero-sum game by adding an additional dummy player (often called "the board"), whose losses compensate the players' net winnings. Link. [/ QUOTE ]
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#15
10-08-2005, 05:12 PM
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Re: Wealth creation in zero sum games
Squiffy, they are not completely different. Just because poker is more narrowly bounded than the stock market does not mean they necessarily follow fundementally different rules. Suppose for a minute that the market was as narrowly bounded as poker. Are there different rules between them? Or do you believe the short term market wealth creation caused by expansion and innovation cannot end. A perpetual motion machine?
It's interesting that for a short time a zero sum game can appear to create wealth for all the players. Such a situation can appear in poker under conditions I outlined earlier. Is that what's happening in the market? Whatever you decide, you must know that resources are far from inexhaustable. If you are planning to pump "all the matter in the universe" into the market, then I have some land on pluto to sell you.
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#16
10-08-2005, 06:22 PM
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Re: Wealth creation in zero sum games
[ QUOTE ]
I have not added a player to make poker a zero sum game.. the rake is part of the system! [/ QUOTE ] As a player, I only look at it from the players perspective, and while the rake is a part of the process -- it's not one of the players. Just out of curiosity (I would have to assume you also consider dog and horse racing a zero-sum-game) -- do you consider any gambling game (aside from warfare) to be negative sum?
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#17
10-09-2005, 12:02 PM
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Re: Wealth creation in zero sum games
[ QUOTE ]
As a player, I only look at it from the players perspective, and while the rake is a part of the process -- it's not one of the players. Just out of curiosity (I would have to assume you also consider dog and horse racing a zero-sum-game) -- do you consider any gambling game (aside from warfare) to be negative sum? [/ QUOTE ] EV and zero-sum are different concepts! When you place a bet in a gambling game against the house, the house is clearly a player.
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#18
10-09-2005, 02:21 PM
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Re: Wealth creation in zero sum games
[ QUOTE ]
EV and zero-sum are different concepts! [/ QUOTE ] I know. That wasn't the question. [ QUOTE ] When you place a bet in a gambling game against the house, the house is clearly a player. [/ QUOTE ] Understood. But in casino poker, you're not betting against the house -- the house is a parasite.
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#19
10-09-2005, 02:52 PM
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Re: Wealth creation in zero sum games
[ QUOTE ]
the house is a parasite. [/ QUOTE ] and the parasite is a part of the poker ecosystem [img]/images/graemlins/smile.gif[/img] In any case, it doesn't really matter how you classify the rake, because from a game theory perspective you still have to account for the rake effect either way! [img]/images/graemlins/smile.gif[/img]
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#20
10-09-2005, 04:31 PM
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Re: Wealth creation in zero sum games
[ QUOTE ]
In any case, it doesn't really matter how you classify the rake, because from a game theory perspective you still have to account for the rake effect either way! [/ QUOTE ] My thinking is that in a raked game, the pie is shrinking. In the end, the sum of players gains and losses must add up to less than zero. A negative sum game. While poker has always been the primary example of a zero sum game -- I understand the example to be a home game.
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