From: John Conover <john@email.johncon.com>

Subject: Re: CNET.com - News - E-Business - Latest dot-com bomb: TheMan.com

Date: 4 Nov 2000 02:34:24 -0000

And what should Gore do with a 22% chance of winning? What is his optimal strategy? He should use a Greedy algorithm, (which has characteristics of what the mathematicians call a "Devils Stair Case",) over the next four days, which means he bets half of 47 - 43 = 6 / 2, or 3% of his tracking poll, every day, until he is in the lead. This means Gore should risk PO'ing 3% of his constituents for a chance at gaining 3% of Bush's constituents, every day until the end of the election, or until he is ahead of Bush, (i.e., sling some mud.) And what would Gore's probability of winning be? let r = (1 - p) / p = (1 - (0.43 / 3)) / (0.43 / 3) = 5.98 P = (r^0.43 - 1) / (r^0.47 - 1) = 0.89 remarkably, almost 90%! That is, unless G. W. Bush does the same thing, in which case it moves Gore's chances back to a 22%. Bottom line, mud slinging is not only the way of politics-its optimal. And, in the current state of affairs, Gore has absolutely nothing to lose by slinging mud, (with only a 22% of winning if he doesn't.) John BTW, tsinvest does not use a Greedy algorithm, or Devils Stair Case. If p < 0.5, it simply refuses to invest in the stock-and if no stocks have p > 0.5, it will withdraw from the market, (although you can override this if you are foolish-its the -D option.) John Conover writes: > That's about a 4 in 5 chance of winning. But it can be wrong 1 chance > in 5, too. What this means is that you play this game many times, you > will win 4 out of 5 times. > > So, you wouldn't want to bet your nest egg on it, (you stand a 20% > chance of losing everything on the first game, if you do, and you > can't play any longer.) But you have to bet something, otherwise you > can't make anything, (another of mathematics most profound insights.) > > The optimum lies in between. And the magic optimum is when F = 2P - 1, > where P is the probability of a win, (0.78 on Bush in this case,) and > F is the fraction of your nest egg to wager, (or about 56% in this > case.) > > Based only on the popular vote, of course-and I don't know any bookies > that taking bets based only on the popular vote. > > John > > BTW, the -d option to tsinvest controls how the program does this > methodology; the -d1 is what was outlined here. > > John Conover writes: > > > > So, Bush has a 0.84 * 0.93 chance of winning, or about 78%, > > (considering only the popular vote,) based on the accuracy of the > > tracking polls, and the ability of Gore to move them. > > > -- John Conover, john@email.johncon.com, http://www.johncon.com/

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