1. The Vegas Coin Flip Dilemma You are in Vegas with $10,000. This is your entire bankroll. The game is simple. I flip a fair coin. You may call heads or tails. If you call correctly, your bankroll increases by 50%. If you call incorrectly, your bankroll decreases by 40%. My game has two unusual conditions: 1. You must bet your entire current bankroll each time you play. 2. You must decide now how many times you will play. You may choose to play anywhere from 0 to 100 times. How many times should you play? Submitted by tartle · Added 4 July 2026 · Updated 17 August 2026 Guess: Guess | Show Hint Show Solution Show Game Open Game Hint: This is a classic economics problem that even economists get wrong! Solution: The answer is none. This is a terrible proposition for both you and me. From my perspective, if I have a hundred people playing, I am losing 5% each round. From your perspective, unless you are the lucky ten percent (~13.6%), you are losing 5% each round. Here is the math behind it. 1. House perspective: expected value Each round, the player’s bankroll is multiplied by: Heads: ×1.5 Tails: ×0.6 Expected multiplier: 0.5 × 1.5 + 0.5 × 0.6 = 0.75 + 0.30 = 1.05 So the player gains 5% in expected value per round. That means the house loses 5% in expected value per round. After 100 rounds, expected player bankroll is: $10,000 × 1.05^100 ≈ $1,315,013 So from the house’s perspective, this is a terrible game to offer. 2. Player perspective: compound growth For the player, expected value is misleading because the whole bankroll is being compounded. The compound-growth multiplier is the geometric mean: sqrt(1.5 × 0.6) = sqrt(0.9) ≈ 0.9487 So the typical player loses: 1 - 0.9487 = 0.0513 or about: 5.13% per round That is why the player’s typical outcome is bad even though the expected value is positive. 3. After 100 rounds If the player gets H heads and 100 - H tails, final bankroll is: $10,000 × 1.5^H × 0.6^(100-H) To finish ahead, they need: 1.5^H × 0.6^(100-H) > 1 Take logs: H ln(1.5) + (100 - H) ln(0.6) > 0 Solve: H > 55.749... So the player needs at least: 56 heads out of 100 The probability of getting 56 or more heads with a fair coin is: P(H ≥ 56) ≈ 13.6% So: About 13.6% of players win. About 86.4% of players lose. The Vegas Coin‑Flip Dilemma Decide now: how many hands do you play? You hold $10,000 — your whole bankroll. Each hand, a fair coin is flipped and you call it. Call right, your money grows +50%. Call wrong, it shrinks −40%. You must stake the entire bankroll every hand, and commit up front to a fixed number of hands. Hands you commit to 20 Deal one hand‑by‑hand Send 10,000 gamblers Ensemble average Typical gambler (median) Individual paths Starting $10,000 Ensemble average predicts $10,000 — Typical outcome predicts $10,000 — Finished ahead of $10k — of 10,000 gamblers Effectively wiped out — left with under $100 (This interactive visual was generated with AI)
Comments (1)
Honestly, if you are fine with a chance of losing the money, you should go for 100x, because if you do win, you win big. Also, if between rounds you round your money up to cents, you won't drop below 1 cent.
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