Subfair red-and-black with a limit

Author:

Heath David C.,Pruitt William E.,Sudderth William D.

Abstract

Suppose a gambler has an initial fortune in (0,1) and wishes to reach 1. It is known that, for a subfair red-and-black casino, the optimal strategy is always to bet min ( f , 1 f ) \min (f,1 - f) whenever the gambler’s current fortune is f. Furthermore, the gambler should likewise play boldly if there is a house limit z which is the reciprocal of a positive integer; i.e., he should bet min ( f , 1 f , z ) \min (f,1 - f,z) . We show that if 1 / ( n + 1 ) > z > 1 / n 1/(n + 1) > z > 1/n for some integer n 3 n \geqq 3 or if z is irrational and 1 3 > z > 1 2 \frac {1}{3} > z > \frac {1}{2} , then bold play is not necessarily optimal.

Publisher

American Mathematical Society (AMS)

Subject

Applied Mathematics,General Mathematics

Reference4 articles.

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