Hello dear community,
In class we discussed the following task with the following solution:
I don't understand the substitution with 1+e in b). Where does it come from and what does it do here?
Lg
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You mean 1-e? And that’s not a substitution (if I guess your mind is right).
If the game is lost, the bet is gone, so “win” -e, logical.
g=0 from the starting table does not mean (what you could misinterpret) that it returns the bet, but that you get 1 €, and that is “random” 0 € at 1 € bet. If you use e €, you will win -e € bet +1 € payout = 1-e €.
Accordingly, g=1 means that you get 2 € paid out (original: -1 € bet plus 2 € payout = +1 € payout for the player; in general: -e € bet plus 2 € payout = -e+2 € = 2-e €), and g=4, there is 5 € in case of profit for the player, therefore now 5 € as a win.
Thank you