Book contents
- Frontmatter
- Contents
- Introduction
- 1 A day at the races
- 2 The long run
- 3 The vice of gambling and the virtue of insurance
- 4 Passing the time
- 5 A pack of cards
- 6 Other people
- 7 Simple games
- 8 Points of agreement
- 9 Long duels
- 10 A night at the casino
- 11 Prophecy
- 12 Final reflections
- Appendix A The logarithm
- Appendix B Cardano
- Appendix C Huygens's problems
- Appendix D Hints on pronunciation
- Bibliography
- Index
1 - A day at the races
Published online by Cambridge University Press: 06 July 2010
- Frontmatter
- Contents
- Introduction
- 1 A day at the races
- 2 The long run
- 3 The vice of gambling and the virtue of insurance
- 4 Passing the time
- 5 A pack of cards
- 6 Other people
- 7 Simple games
- 8 Points of agreement
- 9 Long duels
- 10 A night at the casino
- 11 Prophecy
- 12 Final reflections
- Appendix A The logarithm
- Appendix B Cardano
- Appendix C Huygens's problems
- Appendix D Hints on pronunciation
- Bibliography
- Index
Summary
Money for nothing
Horatio Bottomley was a flamboyant Edwardian journalist, financier and crook. It is fitting that he is now chiefly remembered by a story which ought to be true but, apparently, is not.
According to legend, Bottomley arranged a race at a Belgian seaside course in such a way that he owned all six competing horses and could instruct the jockeys as to the precise order in which they should finish. The bets he laid should have made a fortune but, unfortunately, half way through the race, a thick sea fog swept in and all ended in confusion.
On arriving at a race course, the first question that occurs to a mathematician is ‘Can I make money without risk?’. This suggests the harder question ‘If I bet Y, what is the maximum sum L that I can guarantee to get back?’. If L > Y, then I can guarantee a profit. If Y > L, I cannot.
In the old days, when two gentlemen A and B different in their views on the ability of a certain horse to win a certain race, A would offer to back his judgement by wagering y at odds of a to b. If B accepted the wager, then B would pay A the amount y if the horse won and A would pay B the amount ya/b if the horse lost.
- Type
- Chapter
- Information
- Naive Decision MakingMathematics Applied to the Social World, pp. 1 - 33Publisher: Cambridge University PressPrint publication year: 2008