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Old 09-24-2007, 12:04 AM
mjkidd mjkidd is offline
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Join Date: Jul 2006
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Default Re: Taking a shot at mid-stakes

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The goal of the deal was for it to be +EV for both. You can do this mathematically though it's difficult. You get the staker's EV by multiplying the probability of a win times the staker's % of a win times the average win and adding that to the probability of a loss times the staker's % of a loss times the average loss. The staker's percentages are set by the parties. The probability of a win/lose is attainable using basic win rate calcs. The average win/loss is harder. You have to fine the mean of a truncated normal distribution. I found this paper pretty helpful in grasping the basics.

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So based on all this statistical analysis the optimal staking deal is the one that knish offers Matt Damon after he goes busto?
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