Wagering practice – “You might as well wager everything”
This scenario is courtesy of a fellow Keith: Whitener, who won seven games and finished second in his TOC. (He’ll also be in The Battle of the Decades.)
How do you feel about these three wagers?
My gut instinct: good thing Keith got it right, or John-Clark would have to suffer the embarrassment of having won a game with $102!
My second instinct: a win is a win, even if, after taxes, you’re left with double digits. (You will be guaranteed $1,000 at some point for finishing third.)
Click here for the answer!
(Thanks to the J! Archive)
Answers to Wednesday’s scenario:
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- (1/8) I suggested this wagering might be improper. What’s better for each player?
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- (2/8) Let’s start from scratch.
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- (3/8) Rule #1, first vs. second: Michael needs to wager at least 7,600 to cover a double-up by Rory …
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- (4/8) Rule #1, second vs. third: … and Rory needs to wager at least 6,400 to cover Suzan.
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- (5/8) Rule #2: Suzan needs to stay above Michael and Rory if they both get it wrong. She’ll need to have at least 4,000 – which means she can wager at most 4,000.
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- (6/8) Rule #3: Suzan should also wager at least 3,600 to cover a zero wager by both players.
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- (7/8) In the actual game, Michael was the only one who made a reasonable wager (although he tacked on the extra dollar).
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- (8/8) Notice that Rory, since he decided to play conservatively, should have wagered at least 2,400 – covering Suzan’s maximum rational wager. (He put himself at an unnecessary risk here.)
Actually, if John-Clark had won with just $102, he’d have been under the withholding threshold and might’ve been lucky enough to keep the whole thing. (He’d be taxed anyway the next day, since he’s guaranteed a grand–I think the threshold was $600–so I guess that makes this whole point moot.)
The only thing I disagree with in the analysis is the suggestion that Keith should bet at least 3000 in order to cover a possible zero wager by John-Clark. First of all, the vast majority of leaders wager enough to cover the trailers so I think trailers should not cover a potential 0 bet by a leader unless they give up NOTHING by doing so. By betting 3000 instead of 2400 (or 2401) he gives up the potential to play again the next day if Anne bets the suggested rational 1800 and gets it right and he gets it wrong. By betting 3000 instead of 2400 he would lose 7800 to 8400 in this scenario.