Index
addiction, xii–xv, 29, 179, 218, 264n4; behavioral analysis and, 155–56, 186, 193–201; big business and, 36, 39–40; Brummell and, 41–42; compulsive gamblers and, 155, 184, 187, 201, 213; dopamine production and, 200; emotional highs and, 154, 194–96, 200; family effects from, 194; greed and, 156 (see also greed); loss of savings from, 209–10; neurobiological research on, 193–94, 199–201; pathological gamblers and, 185–89, 193–201; problem gamblers and, 186–87, 190, 193; retirees and, 209–12; as self-medication, 194–96; sensation-seeking and, 194–95; suicide and, 194; ventral tegmental area (VTA) and, 199–200; Western culture and, 186
Alexandrovna, Polina, 184, 188
Alfonso, I, King of León and Castile, 9–12
algebra, 20–23, 123–25, 227, 239
Allais Paradox, 178–79
Ambassadors, The (Holbein), 239
America: California v. Cabazon Band of Mission Indians and, 53; Civil War and, 48, 53; dice and, 7; fascination with lotteries in, 50, 131, 193, 214–15; gambling growth in, 46–53; Mississippi riverboats and, 1, 46–47; New Orleans and, 1, 46–48; patholgical gambling and, 193–94; percentage of population visiting casinos, 193–94; prohibition and, 46; stock market crisis of 2008 and, 59–71
American International Group (AIG), 64, 67–68
American Psychiatric Association, 187
American Revolution, 34, 46, 50–52
anchoring, 86–87
angstlust (desire for punishment), 183
Apianus, Petrus, 239–40
Arithmetic Book, The (Apianus), 239–40
Ars Conjectandi (Bernoulli), 33, 118–19, 123, 126–27, 257n4
Ars Magna (Cardano), 20
Ashton, John, 34
astragals, 5–7, 26f, 122–23, 236
Atlantic City, 53–54, 98–100, 164–65, 199
Augustus, 9
Austria, 43
averages, 21–22; law of, 23; weak law of large numbers and, 118–30
backgammon, 27, 132; box and, 58–59, 224; captain and, 58–59; cheating and, 59, 131; chouette and, 58–59, 224; crew and, 58–59, 225; description of, 219; historical perspective on, 7–11; partner splits and, 59
banknotes, 39
banks: closures of, 64–65; credit-default swaps and, 57, 64, 66–71; government bailouts and, 62, 64, 66, 214; Leeson and, 132; nationalization of, 64; ninja loans and, 62–63, 225; sub-prime crisis and, 60, 64–67, 70; tight networks of, 62–63
behavior: acquired, 196; addiction and, 155–56, 186, 193–201 (see also addiction); cheating, 28, 34, 52, 58–59, 131–32, 143, 160–61; cognitive behavioral theory and, 197–98; conditioning and, 191; fairness and, 7; fame and, 170; greed and, xvii, 54, 59, 61–63, 62, 71, 135, 156, 162–63, 169–70, 180, 202–4; group intelligence and, 141–42; guilt and, 182–84; house money effect and, 157–67, 172, 176–78; hypermiling and, 87–88; knowing when to quit, 168–81; makings of a gambler and, 182–201; neurobiological research on, 193–94, 199–201; personality theory and, 189–90 (see also psychology); pseudonyms and, 45; random, 126; reinforcement and, 190–91; repetitive, 190; risk aversion and, 2 (see also risk); role models and, 196; self-protection and, 4; suckers and, 134, 205, 214; superstition and, xvi, 5, 195–98
bell curve, 111–15, 128–29, 235, 242–43
ben Gerson, Levi, 14
Benner, Katie, 68
Bergler, Edmund, 183, 185–86, 200, 260n2
Berhnardt, Sarah, 45
Bernoulli, Daniel, 93–94, 96 Bernoulli, Jacob, 33, 93; moral certainty and, 127; weak law of large numbers and, 118–29
Bernoulli, James, 109–10
Bernoulli, Nicholas, 33, 109–10
better-than-even odds, 29–30, 55, 134, 215–16, 237–38
bingo, 53, 131, 142, 209, 219–20
binomial frequency curve, xvii, 31, 243–44; defined, 229–30; expectation and, 109, 113; law of large numbers and, 123, 128–29, 227; Pascal’s triangle and, 31–32, 105; standard normal curve and, 235, 242
blackjack, 168, 210–11; card counting and, 144, 204; cheating and, 131, 143–44; computer analysis of, 145; defined, 220; draw and, 144–45; goal of, 143; gambler’s psyche and, 195–96; hard hand and, 225; house advantage and, 143–44, 150–51, 160; Lucky Luce and, 160; MIT players and, 204; shifting advantage in, 143–45; skill and, 131–32, 138, 143–46, 150–51, 154; soft hand and, 226; stand and, 144–45; strategy for, 144–45; Thorp and, 143–45
bookies, xiii, xv, 141–42, 159–60
break-even effect, 166
bridge, 157–58
Britain, 15, 18; Bath, 33–34; Brummell and, 41–42; coffeehouses and, 37–38, 55–56; government bailouts and, 64; House of Commons and, 54; London, 17, 28, 37–41, 51, 54–60, 68, 169, 194; New Gaming Act and, 42–43; transportation and, 43–44; Unlawful Games Act and, 43
British National Lottery, 194
Brueghel, Peter (the Elder), 26f
Brummell, George “Beau,” 41–42
buying long, 57
Cardano, Girolamo, 1, 131, 257nn4,5; algebra and, 20; background of, 20; chance studies of, 20–24; law of large numbers and, 20–24, 118–19; probability and, 20–24, 29–30
cards, 46, 95, 204, 240, 245–46, 250n13; analysis of opponent and, 160–63; baseball, xii, 158–59; big business and, 34, 37–40; coffeehouses and, 38; courage and, 160; designs of, 48; gambler’s psyche and, 192–93; historical perspective on, 8, 11; immigrants and, 48; Langer experiments and, 166–67; memory and, 160; as military tool, 48; money management and, 160; physiological deception and, 160; professional players and, 25–27; sense of hand rarity and, 47; skill and, 132–34, 143–45; stripper decks and, 131. See also specific game
Casibus Viorum Illustrium, De (Boccaccio), xvi
casinos, xv, xvii, 1, 264n4; Allais Paradox and, 178–79; alluring customers into, 48, 50; anonymity and, 28; Aqueduct, 53–54; bath towns and, 43–44; beating the system and, 199; behavioral analysis and, 161, 163, 167–68, 170, 179, 188–96, 199, 201–5, 209–11; big business and, 37, 40–45; blackjack and, 143–45; Brummell and, 41–42; card counting and, 144, 204; Casion Ruhl, 211; Claridge Hotel and Casino, 99; conditioning and, 191–93; croupiers and, 28, 39, 47, 75, 95, 131, 164–66, 184, 193, 195, 202–4, 225; designed environment of, 48, 50, 167, 191–92, 197, 209, 211; dunners and, 28, 225; early gambling rooms and, 27–28, 35–36; expectation and, 115–17; extravagance of, 48, 50; flashers and, 28, 225; Foxwoods, 209, 211; free food at, 48, 50; game length and, 191–92; Golden Nugget, 98–100; honesty and, 94–95; house edge and, 94–95, 138, 150–52; house money effect and, 163–67; Indian reservations and, 53; Las Vegas and, 57, 98–99, 144, 204; Monte Carlo and, 45, 75, 95–98, 108–9, 117, 195–96, 211; Nice and, 195–97, 211; online, 201; percentage of Americans visiting, 193–94; probability predictions and, 92–100; professional players and, 23–24; profits of, 53, 193; prohibition and, 40–45; pseudonyms and, 45; publicity from occasional big winners and, 199, 204–5; reinforcement and, 190–91; retrieving losses and, 202–4; shame of, 44–45; skill and, 143–45, 149, 152–53; smoking bans and, 264n4; stock market as, 59, 66; transportation to, 43–45; world’s largest, 53
central limit theorem, 109–10, 128–29
chance, 15, 96, 98; Cardano and, 20–24; central limit theorem and, 109–10, 128–29; cumulative outcomes and, 88–94, 101–2, 126; Galton board and, 88–92; hot hand fallacy and, 205–8; Langer experiments and, 166–67; mathematical theory of, 27–36; measurement of, 19–26; notation for, 101; Pascal’s triangle and, 31–32; probability and, 76 (see also probability); standard normal curve and, 110–15; symmetry and, 103; weak law of large numbers and, 118–30. See also odds
cheating, 28, 161; backgammon and, 58–59; blackjack and, 143–44; crooked dice and, 34, 77–79, 132; greed and, 59, 62; Kerviel and, 60–61; lotteries and, 51–53; Lucky Luce and, 160; money and, 58; new ways of, 132; partner splits and, 59; skill and, 131–32; stock market and, 60–61; stripper decks and, 131; sub-prime crisis and, 60, 64–67, 70
Chebyshev inequality, 121–23, 227–28
chess, 10, 27, 198, 250n12, 262n33
Children’s Games (Brueghel), 26f
China, 13, 50, 64–65, 240, 239
choice theory, 170
Chu Shï-kié, 239
Cliburn, Van, 163
cockfighting, 17, 34, 158, 250n13
cognitive behavioral theory, 197–98
coins, 117, 212; cumulative outcomes and, 88–90, 93–94; irrational intuition and, 92–93; law of large numbers and, 22–23, 87, 119–20, 126, 128–29; long–runs and, 206–7; notation for, 101–3, 105; perturbations and, 90; St. Petersburg Paradox and, 93–94, 96–97, 256n13; standard normal curve and, 111; symmetry and, 103; tendency and, 23
collective unconscious, 182
Columbia University, 51, 76, 141
combinations, xvii, 15, 215, 229, 257n5; combinatorics and, 13, 33; defined, 230–32; early works on, 12–15; equations for, 14, 230–32; Galileo and, 24–25; Galton board and, 88–92; historical perspective on, 12–14; law of large numbers and, 21–22, 124 (see also law of large numbers); Pascal’s triangle and, 31–32, 105; poker hands and, 80–82; skill and, 136, 138, 149, 152
Committee on the Social and Economic Impact of Pathological Gambling, 193
conditioning, 191–93
Cotton, Charles, 36
counterfeiting, 99–100
crap out, 224
craps, 46–47, 54, 204, 257n2; description of, 220; expectation and, 101, 105; fairness and, 148–49; hazard and, 145–46; historical perspective and, 9, 17; hot hands and, 205–6; house edge and, 150–51; odds of, 146–49; policy shops and, 143; shooter and, 146; skill and, 131, 143–49
credit-default swaps, 57, 64, 66–71, 224
cumulative outcomes, 95, 126; coins and, 88–90, 93–94; frequency distribution and, 104–15; Galton board and, 88–92, 215–16; notation for, 101–2; roulette and, 97–98; standard normal curve and, 110–15; St. Petersburg paradox and, 93–94, 96–97, 256n13
Cutler, Jerry, 157–58
Dandalos, Nick “The Greek,” 182, 204
Deal or No Deal (TV show), xvi; behavioral analysis and, 168–76; house money effect and, 172, 176; memory and, 171; odds of, 171–76; rules of, 171–72; safety shields and, 176
dealer’s up card, 225
de Carcavi, Pierre, 29
de Moivre, Abraham, 109, 128–29
de Montmort, Pierre Rémond, 30
dice, 46, 58, 262n33; astragals and, 5–7, 122–23, 236; Augustus and, 9; books on, 9–10; boxcars and, 30, 215; Caligula and, 9; casinos and, 38–39 (see also casinos); coffeehouses and, 38; combinations and, 24–25; crooked, 34, 77–79, 132; cubic, 12; expectation and, 103, 108; fair, 5–7, 12, 25, 30, 73, 77–78, 234; Galileo and, 24–25; gambler’s psyche and, 197–98; God and, 75; historical perspective on, 5–12, 15, 17; hot hands and, 205–6; idealized model of, 77–78; illusion of luck and, 20, 215–16; initial position and, 91; law of large numbers and, 23, 118, 124–30; lots and, xv, 6–8, 212; materials of, 12; modern, 8; mystery of, 20; Nero and, 9; notation for, 101–3; odds in, 144–45; Pascal’s triangle and, 31–32, 105; perfect certainty and, 77–79; probability and, 8, 75–79, 95; professional players and, 20, 23–25, 29–30, 34; psychology and, 77; shooter and, 146–47, 149, 154, 206, 220, 226; skill and, 131–32, 146, 151–54; snake eyes and, 23, 30, 79; spread of, 7–8; symmetry and, 103. See also specific game
Doctrine of Chances, The (de Moivre), 109
Dostoyevsky, Fyodor, 33, 43–44, behavioral analysis and, 163–64, 170, 183, 186–89, 197, 202–4; finances of, 188–89; Frank and, 188; gambling of, 188–89
double-or-nothing ventures, 94
draw, 225
drop, 225
du Camp, Maxime, 83
early win hypothesis, 192
economic issues: bank closures and, 64–65; casino house edge and, 94–95, 138, 150–52; commodities prices and, 62–63; credit–default swaps and, 57, 64, 66–71, 224; depression forecasting and, 65; earning power and, 62; free market capitalism and, 141; government bailouts and, 62, 64, 66; Great Depression and, 65, 70, 157; inflation and, 62–63; minimum wage and, 62; stock market crisis of 2008 and, 59–71
ego, 185
e-mail scams, 179–81
equations: coin runs, 97; combinations, 14, 230–32; craps odds, 146–48; expectation, 232; horse racing odds, 139–40; law of large numbers, 119–23, 128, 227–28; lottery odds, 136; mean, 233; Pascal’s triangle, 32; poker odds, 133–34; roulette runs, 105–6; slots odds, 150; standard deviation, 122–23, 234; standard normal curve, 110–11, 235; sum of probabilities, 107
expectation, xvii, 4, 11–12, 65; as averages, 116–17; behavioral analysis and, 170–79, 201–8, 215–16; betting against, 101–17; credit-default swaps and, 57, 64, 66–71; defined, 232; greed and, xvii, 54, 59, 61–63, 71, 135, 156, 162–63, 169–70, 180, 202–4; lotteries and, 136–38; maximization of, 136, 144; positive, 11–12; probability predictions and, 77–80, 85–87, 92–97; professional players and, 21–25; roulette and, 95–96; skill and, 136–41, 144–45, 149–52; standard normal curve and, 111–15; stock market and, 59–71; weak law of large numbers and, 118–30. See also specific game
fairness: coins and, 8, 87, 92–97; craps and, 148–49; dice and, 5–7, 12, 25, 30, 73, 77–78, 234; lotteries and, 51–53; odds and, 24, 136–38; roulette and, 73, 97, 108–9, 135
favorite long-shot bias, 141–42
Fermat, Pierre, 1, 30, 123–24, 216, 238
Fibonacci numbers, 239
France, 5, 15, 39; Calais, 42; Napoleonic Wars and, 39; Nice, 45, 195–97, 211; Paris, 27–28, 37, 43, 54, 77, 83, 95; prohibition of gambling and, 40; transportation and, 43–44
Franklin, Benjamin, 52
frequency distribution: binomial frequency curve and, xvii, 31–32, 105, 109, 113, 123, 128–29, 227, 229–30, 235, 242–44; central limit theorem and, 109–10, 128–29; curve of, 110–12; expectation and, 109, 113; law of large numbers and, 123, 128–29, 227 (see also law of large numbers); normal distributions and, 110; Pascal’s triangle and, 31–32, 105; perfect, 108–9; roulette and, 104–8; standard normal curve and, 110–15, 235, 242
Gambler, The (Dostoyevsky), 33; behavioral analysis and, 163–64, 183–84, 187–89, 193, 197, 202–5; hot hands and, 202–6; retrieving losses and, 202–4
Gamblers Anonymous, 193–94
gambler’s fallacy, 23–24, 199; break-even effect and, 166; fantasy of luck and, 166–67; hot hands and, 205–8; law of large numbers and, 118–30, 214–15; probability notation and, 101–3
gambling, xi; addiction and, 155–56, 186, 193–201 (see also addiction); Allais Paradox and, 178–79; analysis of opponent and, 160–63; anonymity and, 28; banknotes and, 39; bookies and, xiii, xv, 141–42, 159–60; as business transaction, 39; California v. Cabazon Band of Mission Indians and, 53; casinos and, 199, 201–5, 209–11 (see also casinos); Christmas and, 17; coffeehouses and, 37–38, 55–56; combinations and, 12–15, 21, 24–25, 91, 124, 136, 138, 149, 152, 215, 229–32, 257n5; compulsive, 155, 184, 187, 201, 213; conditioning and, 191–93; cons and, 99–100, 179–81; court life and, 15, 17, 27, 37–38; credit-default swaps and, 57, 64, 66–71; croupiers and, 28, 39, 47, 75, 95, 131, 164–66, 184, 193, 195, 202–3; denial of losses and, 198; denied love and, 190; as desire for punishment, 183–85; double-or-nothing ventures and, 94; early win hypothesis and, 192; eight standard games of, 131; emotional high of, 154, 194–96, 200, 203–4; as escapism, 196; family effects from, 194; favorite long-shot bias and, 141–42; French obsession with, 37; game length and, 191–92; greed and, xvii, 54, 59, 61–63, 71, 135, 156, 162–63, 169–70, 180, 202–4; group intelligence and, 141–42; as healthy activity, 38; Hialeah delusion and, xii, 23–24; high stakes and, 40; historical perspective on, 3–18; hot hand fallacy and, 205–8; house edge and, 94–95, 138, 150–52; house money effect and, 163–67, 172; illusion of control and, 61, 153–54, 163–67; immigrants and, 48; Indian reservations and, 53; insurance and, 55–56; Internet and, xvi, 262n39; law of large numbers and, 119–20 (see also law of large numbers); losses from, 41–43, 47, 56, 159–60, 186–87, 209–10; luck and, xii–xiv (see also luck); Martingale system and, 116; masochism and, 183–86; Mississippi riverboats and, 1, 46–47; neurobiological research on, 193–94, 199–201; New Gaming Act and, 42–43; New Orleans and, 1, 46–48; online, xvi, 262n39; ordinances against, 15, 40–45; pari-mutuel, 138–39, 225; pathological gamblers and, xvi, 185–89, 193–201; playing pieces for, 5; police and, 36; pot size and, 192–93; problem gamblers and, 186–87, 190, 193; prohibition of, 40–45; psychology of, xiv (see also psychology); retirees and, 209–12; risk and, 2, 4–5 (see also risk); ruination from, 41–43, 47, 56; saloons and, 48; as self-medication, 194–96; selling short and, 56, 60, 62, 66; sensation-seeking and, 194–95; sharps and, 34, 60, 192, 226; stock market and, 54–71; suckers and, 134, 205, 214; teases and, 158, 202; transportation and, 43–44; unconscious desire to lose and, 183; Unlawful Games Act and, 43; U.S. rise of, 46–53; women and, 34, 40, 48, 195, 197; world economic calamity of 2008 and, 58–71. See also specific activity
gambling houses, 189; early gambling rooms and, 27–28, 35–36; extravagant, 48, 50; food perks at, 48, 50; sleazy, 50. See also casinos
game shows, 168–76
God, xvi, 19, 216; breastplate of judgment and, 6–7; law of large numbers and, 129–30; probability and, 75; Urim and Thummim and, 7
Gombauld, Antoine (Chevalier de Méré), 28–29, 215
Grand National Lottery, 52
greed, xvii, 54, 135; behavioral analysis and, 156, 162–63, 169–70, 180, 202–4; Deal or No Deal and, 168–76; e-mail scams and, 179–81; ninja loans and, 62–63; retrieving losses and, 202–4; stock market and, 59, 61–63, 71; Ungar and, 162–63
group intelligence, 141–42
guilt, 182–84
Hamilton, Alexander, 54–55
handicapping, 24, 138–39, 213–14, 225–26
hard hand, 225
Haydn, Franz Joseph, 39
hazard, 17, 19, 27, 46, 48, 145–46, 221
hedge funds: credit–default swaps and, 57, 64, 66–68, 66–71; stock market and, 11, 55–57, 61, 65–71, 224–25
Henry VIII, King of England, 15, 17, 43
horse racing, xii–xiii, 27, 131, 159–60; bookies and, 142; breakage and, 140; cheating and, 132; favorite long-shot bias and, 141–42; Foxwoods and, 209; group intelligence and, 141; handicapping and, 138–39; illegal, 142; law of large numbers and, 140–41; notation for, 101; odds of, 138–42; pari-mutuel, 138–39; policy shops and, 143; track take and, 138–40; vigorish deduction and, 138, 226
house money effect: behavioral analysis and, 163–67, 172, 176–78; Deal or No Deal and, 172, 176
Huygens, Christian, 30, 124–26
ice (protection money), 142, 225
I-Ching (Book of Changes), 13
id, 182
illusion of control, 61, 153–54, 163–67
Indian reservations, 53
International Slots Tournament, 210
Ivanovitch, Alexis, 163–64, 183–84, 188, 193, 203–6
Jefferson, Thomas, 52
jellybean experiment, 141
Johnson, Ben, 17
Johnson, Simon, 65
Jones, Alfred Winslow, 56–57
JP Morgan, 64
Kahneman, Daniel, 85–87, 178, 206
Kerviel, Jérôme, 60–61, 63, 65
Knight, Hazel, 141
Korean War, 48
Langer, Ellen, 166–67
Laplace, Pierre–Simon, 129
Las Vegas, 57, 98–99, 144, 204
law of averages, 23
law of large numbers, xv, 33, 87, 216, 243, 251n3, 256n12; actual vs. calculated mean and, 123–24; bell curve and, 128–29; Bernoulli and, 118–29; binomial frequency curve and, 123, 128–29, 227, 229–30; blind choice and, 126–27; Cardano and, 20–24; central limit theorem and, 128–29; Chebyshev inequality and, 121–23, 227–28; coin flipping and, 22–23, 87, 119–20, 126, 128–29; confusion over, 119–20; de Moivre and, 128–29; determinism and, 129–30; dice and, 23, 118, 124–30; diffusion of molecules and, 212–13; Fermat and, 123; gambler’s fallacy and, 23–24, 118–30, 214–15; God and, 129–30; group intelligence and, 141–42; horse racing and, 140–41; hot hand fallacy and, 205–8; Huygens and, 124–26; implications of, 125–28; independent trials and, 125–28; long–run averages and, 21–23; lotteries and, 214–15; moral certainty and, 127; natural world and, 212–14; Pascal and, 123; Poisson and, 119; random behavior and, 126; roulette and, 118–20, 128, 135; sample size and, 86; self-correction process and, 206; skill and, 135, 142; slots and, 212; standard deviation and, 120–25, 129; stock market and, 65, 73, 213–14; strong, 237; tendency and, 23; weak, 118–30, 227–28, 237
Lehman Brothers, 64, 66–67, 214
“Lenin” (teacher), 76–82
Liber de Ludo Aleae (Cardano), 21, 29, 131, 257nn4,5
Lloyd’s of London, 55–56
London, Shalanda, 169–70
long runs, 22, 25, 214; coins and, 206–7; expectation and, 116–17; gambler’s fallacy and, 23–24 (see also gambler’s fallacy); gambler’s psyche and, 183, 192, 199; hot hand fallacy and, 205–8; probability and, 95; skill and, 135, 141, 143, 149, 151–52; weak law of large numbers and, 118–20, 123, 130
loo, 222
lotteries, xiv–xv; addiction of, 199; American fascination with, 50, 131, 193, 214–15; British National Lottery and, 194; cheating and, 52; financing from, 51, 138; first recorded, 51; fraudulent, 51–53; futility of,xiv, xvi; gaming and, 250n13; Han Dynasty and, 50; historical perspective on, 6, 50–51, 53, 57, 253n4; as honest business, 52; insurance and, 57; law of large numbers and, 214–15; lot concept and, 6; luck and, 134–38, 197–98; municipal projects and, 51–52; numbers game and, 142–43; odds of winning, 136–38, 149; population size and, 137–38; pot size and, 51, 131, 192–93; private, 51; prohibition and, 53; psychology of, 159, 166, 194, 197–99; raffles and, 50–51; revenue from, 51; sharing prize and, 137; skill and, 134–38, 166; state, 51, 53, 136–38, 192–93; taxes and, 137; as threat to industry, 52; Venice and, 51; video, 254n13
Luce, Tony “Lucky,” 160
luck, xi; analysis of opponent and, 160–63; ancient beliefs in, xv–xvi; behavioral analysis and, 157–70, 176, 184–85, 189–92, 195–98, 202–16; “down on our,” 19; fantasy of, 158–59, 163–67 (see also psychology); gambler’s fallacy and, 23–24 (see also gambler’s fallacy); Hialeah delusion and, xii, 23–24; hot hands and, 202–8; “in,” 19; Jewish concept of, 19–20; as material, 19; measurement of, 19–36; omens and, 198; “out of,” 19; pitfalls of, xv; placebo effect and, xvi–xvii; possibility of loss and, 4; as power over mathematics, 205; reason and, 10–11; religion and, xvi, 19; seven and, 19–20; superstition and, xvi, 1, 195–98
McKee, Heather, 172–74
Mandel, Howie, 169
Martingale system, 116
mathematics, xvii, 73–74; beauty of, 118–19; central limit theorem and, 109–10, 128–29; combinations and, 12–15, 21, 24–25, 91, 124, 136, 138, 149, 152, 215, 229–32, 257n5; definite answers and, 78; explaining world phenomena and, 1; likelihood and, 12; perfect certainty and, 77–79; permutations and, 12–13, 15, 230–31, 237; practical application of, 20; probability and, 75 (see also probability); sampling and, 79–80; stock patterns and, 56; theory of chance and, 27–36
“Mathematics of a Lady Tasting Tea” (Fisher), 78
Mbote, Joshua, 179–80
mean, xvii, 76, 232–33, 237; actual vs. calculated, 123–24; standard deviation and, 121–22 (see also standard deviation); weak law of large numbers and, 118–30
meld, 225
Merrill Lynch, 64
Middleton, Thomas, 17
Miljoenenjach (Chasing millions) (game show), 171
Min, xvi
mode, 76
Monte Carlo, 45, 75, 95–98, 108–9, 117, 195–96, 211
Monte Carlo fallacy, 23–24, 199. See also gambler’s fallacy
naked short selling, 57
Napoleon, 39–40
Nash, Richard, 33
neurobiological research, 193–94, 199–201
New Gaming Act, 42–43
Newton, Isaac, 128
New York Stock Exchange (NYSE), 55, 68, 71
odds, xiii–xiv, xvii; Allais Paradox and, 178–79; better-than-even, 29–30, 55, 134, 215–16, 237–38; blackjack and, 144–45; bookies and, 141–42; callouts and, 236–47; Cardano and, 20–24, 29–30; combinations and, 12–15, 21, 24–25, 91, 124, 136, 138, 149, 152, 215, 229–32, 257n5; coins and, 88–90; craps and, 146–49; cumulative outcomes and, 88–98, 101–2, 126; Deal or No Deal and, 171–76; defined, 225, 233; dice and, 8, 77–78; early book on, 14; favorite long-shot bias and, 141–42; Galileo and, 24; group intelligence and, 141–42; handicapping and, 24, 138–39, 213–14, 225–26; horse racing and, 138–42; house edge and, 94–95, 138, 150–52; just below even, 135–36; lotteries and, 136–38, 149; measurement of, 19–26; Monte Carlo fallacy and, 23–24; morning-line, 139, 225; notation for, 101–3; poker and, 80–82, 133–34, 245–46; randomness and, 5–7 (see also randomness); roulette and, 95–96, 104–8; St. Petersburg Paradox and, 93–94, 96–97; skewed, 103, 136, 179; slots and, 150–52; small deviations and, 96
odds or evens, 8
off-track betting (OTB) system, 53 1-2-3–shoot, 8
“Optimum Strategy in Blackjack, The” (Thorp), 144–45
Paine Webber, 56
pari-mutuel betting, 138–39, 225
partner splits, 59
Pascal, Blaise, 1, 29–31, 123–24, 216, 238, 240
Pascal’s triangle, 31–32, 105, 240
pathological gamblers, xvi; behavioral analysis of, 185–89, 193–95, 199–200; dopamine production and, 200; emotional highs and, 194–96; neurobiological research and, 193–94, 199–201; self-medication and, 194–96; slots and, 196–97; ventral tegmental area (VTA) and, 199–200
Pavlov, Ivan, 191–93, 198, 203
permutations, 12–13, 15, 230–31, 237
personality theory, 189–90
pitching pennies, 158
Poisson, Siméon-Denis, 119
poker, 50, 159, 167, 198; analysis of opponent and, 160–63; cheating and, 132; draw, 132–33, 220; high/low, 48, 221; house edge and, 150–51; intuitive calculations and, 132–33; Lucky Luce and, 160; odds in, 80–82, 133–34, 245–46; risk and, 132–34; skill and, 132–34, 138, 146, 150–51; stock market as, 59, 132; stud, 222; Texas hold’em, 222; three–card, 131, 222–23; Ungar and, 160–63; video, 131, 223
policy shops, 143
probability, xvii, 83; bell curve and, 111–15, 128–29, 235, 242–43; Bernoulli and, 33; billiards and, 76–77; binomial frequency curve and, xvii, 31–32, 105, 109, 113, 123, 128–29, 227, 229–30, 235, 242–44; callouts and, 236–47; Cardano and, 20–24, 29–30; central limit theorem and, 109–10, 128–29; combinations and, 12–15, 21, 24–25, 91, 124, 136, 138, 149, 152, 215, 229–32, 257n5; cumulative outcomes and, 88–98, 101–2, 126; defined, 233–34; Fermat and, 30, 123–24, 216, 238; frequency distribution and, xvii, 21, 85, 96, 104–8, 110, 113, 127, 129, 229–30, 235; Galton board and, 88–92; God and, 75; group intelligence and, 141–42; heuristic representations and, 84–85; hot hand fallacy and, 205–8; Huygens and, 30; law of large numbers and, xv, 21–24, 33, 65, 73, 86–87, 117–30, 135, 140–42, 205–6, 212, 214–16, 228, 237, 243, 251n3, 256n12; laws of change and, 15, 96, 98; mean and, 76; mode and, 76; normal distributions and, 110; notation for, 101–3, 105; Pascal’s triangle and, 31–32, 105; perfect certainty and, 77–79; Poisson and, 119; St. Petersburg Paradox and, 93–94, 96–97; sampling and, 79–80, 85–86; sports and, 77; standard normal curve and, 110–15, 235, 242–43; teaching of, 75–77. See also specific game
problem gamblers, 186–87, 190, 193
psychology: addiction and, 36 (see also addiction); Allais Paradox and, 178–79; analysis of opponent and, 160–63; anchoring and, 86–87; autoeroticism and, 185; belief in luck and, 135 (see also luck); Bergler and, 183, 185–86, 200, 260n2; break-even effect and, 166; casinos and, 48, 50, 167, 191–92, 197, 209, 211; childhood influences and, 190; collective unconscious and, 182; compulsive gamblers and, 155, 184, 187, 201, 213; conditioning and, 191–93; courting danger and, 59; Deal or No Deal and, 169–76; deception and, 160; denial of losses and, 198; denied love and, 190; dice and, 77; early win hypothesis and, 192; emotional highs and, 194–96; escapism and, 196; expecting long runs and, 202–8; fairness and, 7; fantasy and, 17, 28, 166, 216; favorite long-shot bias and, 141–42; financial markets and, 1–2, 58–71; Freud and, 182–83, 185; gambler’s fallacy and, 23–24 (see also gambler’s fallacy); game length and, 191–92; games of skill and, 166; greed and, xvii, 54, 59, 61–63, 71, 135, 156, 162–63, 169–70, 180, 202–4; guilt and, 182–84; handicapping and, 138–39; hereditary transmission and, 182–201; heuristic representations and, 83–85; hot hand fallacy and, 205–8; house money effect and, 163–67, 172, 176–78; id and, 182; illusion of control and, 61, 153–54, 163–67; intuitive calculations and, 92–93, 132–33; Langer experiments and, 166–67; law of large numbers and, 86 (see also law of large numbers); lotteries and, 159, 166, 176–77, 194, 197–99; makings of a gambler and, 182–201; masochism and, 183–86; master-of-the-universe notions and, 59, 62, 65; Oedipus complex and, 183, 185; parental approval and, 190; pathological gamblers and, 185–89, 193–95, 199–200; Pavlov and, 191–93, 198, 203; personality theory and, 189–90; placebo effect and, xvi–xvii; poker and, 132–33; pot size and, 192–93; problem gamblers and, 186–87, 190, 193; publicized wins and, 199; retrieving losses and, 209–10; rewards and, 189–90; risk and, 4–5, 168–81; sample size and, 84–86; self-medication and, 194–96; sensation-seeking and, 194–95; Skinner and, 190, 198; superego and, 155, 182; superstitions and, xvi, 1, 5, 195–98; testing theories of, 186; toilet training and, 185; Tversky-Kahneman studies and, 85–87; windfalls and, xiv, 170, 176; wishful thinking and, 60
pull–tabs, 53
randomness, xv, 50, 213–16, 244; combinations and, 12–15, 21, 24–25, 91, 124, 136, 138, 149, 152, 215, 229–32, 257n5; crowd intelligence and, 141; expectation and, 109; fate and, 19; gambler’s psyche and, 190, 194; group intelligence and, 141–42; historical perspective on, 5–7, 12–13, 15; hot hands and, 205–8; house money effect and, 165; illusion of, 205–6; probability and, 85–86 (see also probability); professional players and, 19, 22; rewards and, 190; risk management and, 171, 176; skill and, 136, 141–42, 150–53, 156, 205–6; sports and, 205; stock market and, 69, 73; weak law of large numbers and, 118–30
Rein, Damon, 66–67
rewards, 189–90
risk, 25, 47, 55–56, 109, 211, 217; Alfonso X and, 11–12; Allais Paradox and, 178–79; banks and, 61; courting danger and, 59; credit-default swaps and, 57, 64, 66–68; Deal or No Deal and, 168–76; defined, 260n9; gambler’s psyche and, 188, 195, 199; greed and, 59; historical perspective on, 2, 4–5, 9, 11; hot hands and, 204, 207; house money effect and, 163–67, 172, 176–78; irrational intuition and, 92–93; Langer experiments and, 166–67; law of large numbers and, 21–22 (see also law of large numbers); loans and, 62–63; lust for, 199; marginal utility and, 94; minimization of, 136; poker and, 59, 132–34; probability and, 92–94, 100 (see also probability); psychology of, 4–5, 168–81; reinforcement and, 60; retrieving losses and, 202–4; skill and, 132, 135–38, 141–42, 153; stock market and, 59–71
rouge et noir, 222–23
roulette, 27, 131, 196, 232, 250n13, 257n2, 263n15; American vs. European, 256n18; central limit theorem and, 109–10; cons and, 99–100; cumulative outcomes and, 95–98; expectation and, 111–17; fairness of, 73, 97, 108–9, 135; Foxwoods and, 209; frequency distribution and, 104–8; gambler’s psyche and, 183, 189, 197–99; hot hands and, 206–8; house edge and, 150–51; house money effect and, 163–66; illusion and, 209–10, 214; law of large numbers and, 118–20, 128, 135; luck and, 135; mode frequency and, 96; Monte Carlo fallacy and, 23–24; notation for, 101–3, 105; probability and, 95–109; retrieving losses and, 202–4; risk management and, 168, 170; skill and, 131–32, 150, 154; small deviations and, 96; standard deviation and, 111–15; “Swindled” and, 99–100; symmetry and, 103; vigorous spin and, 132; Walters and, 98–99; zero pocket and, 96
Royal Game of Ur, 8
St. Petersburg paradox, 93–94, 96–97, 256n13
self-medication, 194–96
selling long, 226
selling short, 56–57, 60–62, 66–67, 226
shooter (dice), 146–47, 149, 154, 206, 220, 226
shooter (marbles), 157–59, 226
skill, 198; analysis of opponent and, 160–63; blackjack and, 131–32, 138, 143–46, 150–51, 154; cheating and, 131–32; courage and, 160; craps and, 131, 143–49; gin rummy and, 160; hot hand fallacy and, 205–8; illusion of randomness and, 205–6; marbles and, 159; memory and, 160; money management and, 160; poker and, 132–34, 138, 146, 150–51; psychological deception and, 160; roulette and, 131–32, 150, 154; slots and, 131, 149–53; sports and, 131, 139, 205–6; Ungar and, 160–63
slots, 166, 179; addiction and, 196–97; betting value of, 149; computerized, 150; expectation and, 208–12; Foxwoods and, 209; gambler’s psyche and, 190–92, 196–99; house edge on, 150–51; illusion of control and, 153–54; law of large numbers and, 212; mechanical, 149, 152–53; odds of, 150–52; payout percentage and, 151; reinforcement and, 190–91; skill and, 131, 149–53; virtual payouts and, 210–12; Zabib and, 198–99, 204
snuff, 27–28
soft hand, 226
sports, 34, 40; behavioral analysis and, 160, 198, 205, 209; historical perspective on, 4, 17; probability and, 77; skill and, 131, 139, 205–6; superstition and, 198
standard deviation, xvii, 97–98, 235, 244; Chebyshev inequality and, 121–23, 227–28; defined, 234; expectation and, 111–14; historical perspective on, 6–8; law of large numbers and, 120–25, 129; roulette and, 111–14
standard normal curve, xvii, 110–15, 235, 242–43
stock market, 54, 117; bank failures and, 64–65; as casino, 59, 66; cheating and, 60–61; complexity of equities and, 59; credit-default swaps and, 57, 64, 66–71; forecasting depressions and, 65; futures and, 60–62, 66, 132, 214; government bailouts and, 62, 64, 66, 214; hedge funds and, 11, 55–57, 61, 65–71, 224; inflation and, 62–63; Kerviel and, 60–61, 63, 65; law of large numbers and, 213–14; Leeson and, 132; master-of-the-universe notions and, 59, 62, 65; poker analogy and, 59; selling long and, 226; selling short and, 56, 60–62, 66–67, 226; wishful thinking and, 60
sub-prime crisis, 60, 64–67, 70, 226
superstitions, xvi, 1, 5, 195–98
tabula lusoria (table of play), 8–9
Tartaglia’s triangle, 240
Thorp, Edward, 143–45
Tri-State Megabucks, xiv–xv, 136–38
Tversky, Amos, 85–87, 178, 205–6
UBS, 65
Ungar, Stu, 160–63
Unlawful Games Act, 43
Vallone, Robert, 205
ventral tegmental area (VTA), 199–200
Von Hattingberg, Hans, 185
Wachovia, 64
Walters, William, 98–99
Washington, George, 52
Willoughy, Hugh, 54
World of Mathematics, The (Newman), 78
World Series, 203
Worley, John, 179–81
Wynn, Steve, 98–99
Xenocrates, 13