Search

Keyword

# Gambler's Ruin - Expository Introduction with diagrams

Course Topic(s): Probability | Famous Problems, gambler's ruin | Stochastic processes, discrete Markov chains | Discrete Distributions, Bernoulli and binomial

The Gambler's Ruin problem explained as a conditional probability. For any given amount $$h$$ of current holdings, the conditional probability of reaching $$N$$ dollars before going broke is independent of how we acquired the $$h$$ dollars, so there is a unique probability $$Pr{N|h}$$ of reaching $$N$$ on the condition that we currently hold h dollars. Boundary conditions are imposed. Plots are shown for various probability of winning one round. The case when that probability equals 1/2 is explained. A nice graphic for the Markov model is shown.

Resource URL: http://www.mathpages.com/home/kmath084/kmath084.htm

### To rate this resource on a 1-5 scheme, click on the appropriate icosahedron:

 Current rating: 2.9 number of votes: 199 1 2 3 4 5

Subject classification(s): Simulation | Univariate Distributions | Probability | Statistics and Probability

Creator(s): Kevin S. Brown

Contributor(s): Kevin S. Brown

This resource was cataloged by Carolyn Cuff

Publisher:
http://www.mathpages.com/

This review was published on September 24, 2012