How strong can the Parrondo effect be? II

Author:

Ethier S.,Lee Jiyeon

Abstract

Parrondo’s coin-tossing games comprise two games, A A and B B . The result of game A A is determined by the toss of a fair coin. The result of game B B is determined by the toss of a p 0 p_0 -coin if capital is a multiple of r r , and by the toss of a p 1 p_1 -coin otherwise. In either game, the player wins one unit with heads and loses one unit with tails. Game B B is fair if ( 1 p 0 ) ( 1 p 1 ) r 1 = p 0 p 1 r 1 (1-p_0)(1-p_1)^{r-1}=p_0\,p_1^{r-1} . In a previous paper we showed that, if the parameters of game B B , namely r r , p 0 p_0 , and p 1 p_1 , are allowed to be arbitrary, subject to the fairness constraint, and if the two (fair) games A A and B B are played in an arbitrary periodic sequence, then the rate of profit can not only be positive (the so-called Parrondo effect), but also be arbitrarily close to 1 (i.e., 100%). Here we prove the same conclusion for a random sequence of the two games instead of a periodic one, that is, at each turn game A A is played with probability γ \gamma and game B B is played otherwise, where γ ( 0 , 1 ) \gamma \in (0,1) is arbitrary.

Publisher

American Mathematical Society

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