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by phoenixreader
1049 days ago
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I don't think this is SPP. SPP highlights in the difference between the mathematically optimal choice and the choice chosen in practice. It is a difference between theory and practice. The problem proposed in this article occurs even in theory alone. Non-ergodicity means there is a mismatch between "the average of all possibilities in the next time-step" and "the long-term trend of one datapoint". If we put bounds on the bank in SPP, the first coin toss would still have positive EV. In the new ergodicity problem, even with bounds on the bank, it is unclear whether the "first" coin toss is worth taking. |
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Not if the bank starts with $0. 0 is just as valid a bound as a trillion. You can’t calculate the EV without knowing how much the bank has, and once you know that, you realize the naive calculation for EV is wrong.