I’ve been spending quite a bit of time doing math lately. Specifically of the problem solving type. Since this site is about rational things, lets take a look at mathematical probabilities. It is an interesting subject…well maybe for a geek like me. What is fascinating is the way certain rules always work. It points to a higher organization that we know little about. We just observe how it happens. I promise to keep this basic.
When you flip a coin, the odds are 1:1 that it will turn up heads. It doesn’t matter how many times it is flipped, the odds always stay the same. You can flip the coin three times and get tails but that doesn’t change the odds when you flip the fourth time. This is called gamblers odds. But the odd thing about it (forgive the pun) is if you get three heads in a row, it may seem you are beating the odds, however, the more you flip the coin, the closer it will go back to 1:1. Over twenty flips for instance, you will most likely have ten heads. Having certain results overall doesn’t change the odds for each single flip though.
Insurance companies use probabilities to set their rates. The ratio of claims will stay consistent over a large group and these translate into the odds for a single claim for you. They bet on those odds to make money and due to how reliable probabilities are, they can use close margins.
When you go to the casino, you might win a few, but the longer you play, the closer you will get to the probability that the casino management has calculated ahead of time. This is how they make enough money for the lavish surroundings. Your odds at that particular game is the same each time you play. That doesn’t change. You might win a few times, but the more you play, the closer you will get back to whatever was figured ahead of time by the management. They know the margins and can reliably charge an amount in relation to how many times the game is played so they always come out on top. So as with any entertainment, the experience may be fun, but it can’t be looked at as a money maker.