A Trading puzzle

Quote from Mr Subliminal:

I can only surmise that the duration of a "spin", or the time taken to reach a result, is shorter in this one particular machine by a factor of 80% (ie. 20% shorter). Hence the money put into this machine (which is proportional to the winnings) will, all other things being equal, be greater than for the other machines by a factor of 25% over the same time period.
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Aaaaaaalmost, but no. The duration of spin is exactly the same for all machines.

Yes, one machine gets played more than the others, regardless of where it is placed among the group. Why? (Sorry, no scantily clad women either.)


BTW, I'm not sure that your argument that a faster spin will lead to more play necessarily holds in practice. It sounds logical enough but isn't informed by a study of how actual slot players play. For example, we know that gamblers play for the thrill, knowing fully well that they cannot but lose over time. Thus a gambler might prefer a slower 'spin' in order to get more 'thrill' for their quarter.

For arguments sake consider an extreme example. A retiree vacationer with their bucket of quarters sees a new casino slot contraption: dump your bucket of quarters in the chute and they will be distributed to X machines simultaneously, i.e. spin speed will be maximized. Then again, their day of fun may have suddenly turned into 30 minutes. Suddenly doesn't sound like a fun vacation does it?
 
Quote from BlueHorseshoe:

Ok, this puzzle was recently posed by someone famous so don't search for it on the internet but give it your best shot - definitely trading related:

You own a small casino in Las Vegas. It has 50 standard slot machines. Identical in appearance, they're identical in the function. They have exactly the same payout ratios. The things that cause the payouts are exactly the same. They occur in the same percentages. But there's one machine in this group of slot machines that, no matter where you put it among the 50, in fairly short order, when you go to the machines at the end of the day, there will be 25% more winnings from this one machine than from any other machine. What is different about that heavy-winning machine?

Full disclosure: I had no clue before reading the solution.
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I'm gonna guess that this particular machine pays out more often but at lower amounts, thus maintaining the same payout ratio as the other machines.

The higher frequency of payouts makes the players believe they are doing better and as a result they bet more and thus the machine makes more.
 
Quote from Htrader:

I'm gonna guess that this particular machine pays out more often but at lower amounts, thus maintaining the same payout ratio as the other machines.

The higher frequency of payouts makes the players believe they are doing better and as a result they bet more and thus the machine makes more.
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That sounds like a valid answer and if it was just me I might accept it. However, it was not the answer provided. It might also be argued that it violates one condition of the question, namely that the machines all function the same whereas you suggest they pay differently.

The solution provided does in fact pay in exactly the same increments and frequency for all machines.

But you are extremely close - esp. by addressing player psychology and perception. Somehow I suspect the next person to guess will get it right.

Regardless, it is now 12:30am in Singapore. In the morning, or in about 10 hours I will provide the answer and source if nobody has guessed by then.

Good luck.
 
I love these sorts of puzzle... this one is a bit lame because you
have to know a little about slot machine psychology to get to
the answer (I think :D).

1) the only way this machine will make more is if it gets played
more.

2) Slot machine players play more if they perceive the machine
as being a hot machine -- as pointed out the frequency of
payouts is key to this.

To maintain sameness with the other machines you have to
optimize payout spacing over time -- depending on
whatever pattern of payouts is most attractive to players.

So when the machine decides if the next pull is a winner or
loser you have these considerations:

1) Am I required to payout at this time to maintain sameness
with other machine in terms of probability of the various payouts.

2) If I have no required action -- is it optimal to payout now to
attract players?

If you were to use a more sophisticated version of this sort of
algorithm the machine would not be distinguishable from the
others in terms of function and probability of payout - but the
timely distributions of payouts would attract more play.

Well that's my guess at least.

JT
 
Thanks BlueHorseshoe....like Nitro, I too lost sleep over this.... First I thought it was something having to do with a 'tilt' in the machine...
Then I thought that perhaps it was actually the other 49 that had something wrong with it....
Then I thought that there were less possible combinations, therefore making there more chances of winning....
Then I realized that I was pulling things out of who knows where to come up with the answer, so I gave up, and decided that indeed, Coins is actually correct, and I was standing there in a G-string.......
 
The key to the question is that the payouts over time are the same. However, gamblers are drawn to machines that appear to be "hot" so the machine is designed to produce more jackpots which cause the jackpot bells and lights to go off which attracts more gamblers. So the size and number of payouts are the same but the bells and lights are designed to be triggered at a lower "jackpot" number.

"More bells and lights - more players".
 
Quote from mytwocents:

"More bells and lights - more players".
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I think this violates the "same function" rule.

OK - here's a time plot of a normal machine and the
money maker:

P = payout ... a dash is 30 minutes (or whatever).

normal machine:

----P------PP--P-----------------P-P-----------------P----PP----P

money making machine:

-P-----P------P-----P-----P-----P------P-----P-----P------P------

There is the same number of payouts -- but the normal
machine is "hot" in the morning and late at night. The
money maker is "hot" all day long -- hence optimizing the
attractiveness of payouts as an incentive to play.

JT
 
Quote from BA_Trader:

I love these sorts of puzzle... this one is a bit lame because you
have to know a little about slot machine psychology to get to
the answer (I think :D).

1) the only way this machine will make more is if it gets played
more.

2) Slot machine players play more if they perceive the machine
as being a hot machine -- as pointed out the frequency of
payouts is key to this.

To maintain sameness with the other machines you have to
optimize payout spacing over time -- depending on
whatever pattern of payouts is most attractive to players.

So when the machine decides if the next pull is a winner or
loser you have these considerations:

1) Am I required to payout at this time to maintain sameness
with other machine in terms of probability of the various payouts.

2) If I have no required action -- is it optimal to payout now to
attract players?

If you were to use a more sophisticated version of this sort of
algorithm the machine would not be distinguishable from the
others in terms of function and probability of payout - but the
timely distributions of payouts would attract more play.

Well that's my guess at least.

JT
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This seems like a very solid answer. Of course to make more money on the machine it has to be played more -- so what makes them play this one more? And I am going to agree that it has to give the illusion of being a "hotter" machine, but I think you are seeing it from the wrong angle. Perhaps it has not much to do with the frequency of the payouts, but how close it comes to paying out for the players. More than likely this is just a matter of hope. I think the spins get the players closer to a jackpot, hence compeling those players who just had a "near miss" (which obviously isn't one at all) to take a few more spins.

"Fuck I was sooooo close, if only that apple was a cherry I would have hit for 25large! Hunny go break me another 20!"

My belly says this answer is so simplistic that its probably correct or at least along the right path. Stupid humans...
 
Quote from Ursus_Maritimus:

Perhaps it has not much to do with the frequency of the payouts, but how close it comes to paying out for the players. More than likely this is just a matter of hope. I think the spins get the players closer to a jackpot, hence compeling those players who just had a "near miss" (which obviously isn't one at all) to take a few more spins.
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Good one! and illustrates why the puzzle is a bit lame. You have to know
what factors are driving the players to reach the correct solution.

So the question is: what makes players play more: near misses or recent payouts?

Screw the puzzle - do both of these and get some women in thongs too... a sure
fire solution :D.

JT
 
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