Parrondo'$ Paradox

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Royal
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Parrondo'$ Paradox

Post by Royal » Fri Mar 02, 2012 10:56 am

In the late 1990's, Spanish physicist Juan Parrondo showed how two games guaranteed to make a player lose all his money can be played in alternating sequence to make the player rich.

Science writer Sandra Blakeslee writes that Parrondo "discovered what appears to be an new law of nature that may help explain, among other things, how life arose out of a primordial soup, why President Clinton's popularity rose after he was caught in a sex scandal, and why investing in losing stocks can sometimes lead to greater gains."
hmmmm
The mind boggling paradox has applications ranging from population dynamics to the assessment of financial risk. To understand the paradox, imagine you are playing two gambling games that involve biased coins.

Game A
Each time you toss the coin, the probability of winning (p1) is less than 50%. p1 = .5 - x
If you win: 1$
If you lose: 1$

Game B
First examine if your earnings are a multiple of 3. If no, you toss another biased coin with the probability of winning p2 = 3/4 -x
. If yes, you toss a third biased coin with the probability of winning a mere p3 = (1/10) -x

If game A or B is played separately, you are guaranteed to lose in the long run. However, if you play them alternatively (or even if you randomly switch between games), you'll eventually be rich beyond your wildest dreams! Note that the outcome of game A affects game B during this alternation of play.

Physicist Juan Parando was inspired by ratchets such as this:
Image

The behavior of which can lead to counterintuitive behavior especially when considered for use in microscopic devices. Parrando extended insights relating to physical devices to games.

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Royal
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Re: Parrondo'$ Paradox

Post by Royal » Wed Mar 07, 2012 12:21 am


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Royal
Posts: 10562
Joined: Mon Apr 11, 2011 5:55 pm

Re: Parrondo'$ Paradox

Post by Royal » Wed Mar 07, 2012 12:26 am

Should be renamed to "Sabu's Paradox"

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Royal
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Re: Parrondo'$ Paradox

Post by Royal » Thu Oct 25, 2012 12:30 am

Stealth Bump for Related Thread

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