Bet doubling in gambling and investing

Bet doubling in gambling and investing Purpose – The purpose of this paper is to analyze strategies for gamblers/investors to increase their chances of reaching certain monetary and/or survival goals while facing a losing proposition. Design/methodology/approach – The paper investigates the use of credit by gamblers/investors as a means of increasing their expected survival time and thus their likelihood of winning. The paper considers a strategy in which a gambler/investor engages in bet doubling and uses credit to maximize the probability of winning a specified amount. Findings – The model presented in this paper identifies the amount of credit that will make it possible for a gambler/investor to become a winner with an arbitrarily high degree of probability, even while facing a losing proposition. However, bet doubling can lead to large losses, and negative profits can be expected if the gambler/investor is faced with unfavorable odds. As an extension, the paper considers the impact of limited liability and finds that in that case, total losses are restricted and the gambler/investor can expect a positive net gain even while facing a losing proposition. It is also shown that the cost of obtaining credit is an important consideration and that it is ill‐advised for a gambler/investor to engage in such a strategy when the cost of credit is high relative to the probability of winning. Originality/value – Although bet doubling is not new to the gambling literature, this paper considers the use of credit as a means of increasing survival time and expected net gain. Applications of the model are particularly useful to gamblers/investors when credit can be obtained at low costs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Risk Finance Emerald Publishing

Bet doubling in gambling and investing

The Journal of Risk Finance, Volume 12 (4): 15 – Aug 16, 2011

Loading next page...
 
/lp/emerald-publishing/bet-doubling-in-gambling-and-investing-XzJV8Rbeaf
Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1526-5943
DOI
10.1108/15265941111158479
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to analyze strategies for gamblers/investors to increase their chances of reaching certain monetary and/or survival goals while facing a losing proposition. Design/methodology/approach – The paper investigates the use of credit by gamblers/investors as a means of increasing their expected survival time and thus their likelihood of winning. The paper considers a strategy in which a gambler/investor engages in bet doubling and uses credit to maximize the probability of winning a specified amount. Findings – The model presented in this paper identifies the amount of credit that will make it possible for a gambler/investor to become a winner with an arbitrarily high degree of probability, even while facing a losing proposition. However, bet doubling can lead to large losses, and negative profits can be expected if the gambler/investor is faced with unfavorable odds. As an extension, the paper considers the impact of limited liability and finds that in that case, total losses are restricted and the gambler/investor can expect a positive net gain even while facing a losing proposition. It is also shown that the cost of obtaining credit is an important consideration and that it is ill‐advised for a gambler/investor to engage in such a strategy when the cost of credit is high relative to the probability of winning. Originality/value – Although bet doubling is not new to the gambling literature, this paper considers the use of credit as a means of increasing survival time and expected net gain. Applications of the model are particularly useful to gamblers/investors when credit can be obtained at low costs.

Journal

The Journal of Risk FinanceEmerald Publishing

Published: Aug 16, 2011

Keywords: Bet doubling; Gambling; Investing; Betting; Credit

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off