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Thank you for putting this down clearly. My only qualm with your logic is that this Mansion gift was not a repeated trial, like the repeated birthday gift in your analysis.

If someone offered me a million $1 coinflips where they payout $1.1 to a win, I'd wager the full amount every time right?

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Glad you took the time to read it, and think about it. And yes, Mansion only offered one event, as opposed to my various birthday gift examples above. After laying the PItt wager (before the game) -- with the opportunity to hedge in any amount you wish, or not hedge, you have the choice of accepting the year #2 gift, or the year #1 gift. That's what I was trying to get across. Most would always choose the second year gift, and hedge to one degree or another. I guess I should've presented the gift analogy as a CHOICE between the year 1 and year 2 gift, i.e., the same choice you make when you hedge or do not hedge.

And yes, if you could have a million $1 coin flips, paying $1.1 when you won, you'd of course jump on it every time. Problem with Pitt scenario is that you only get the 1.1 - 1 opportunity once, which is why everyone wouldn't wager the entire $475 (and thus most choose to hedge some amount).

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This can't be right, two posters agreeing with each other in this thread. Mod! [img]/images/graemlins/grin.gif[/img]