Comment by dlss
11 years ago
I completely agree the details are interesting -- there are very few things that focus my attention as completely as statistical decision theories.
If you haven't read Ed Thorpe's The Mathematics of Gambling I think you'd love it. It's about finding these edges regardless of the game. Thorpe is fascinating too -- he invented one of the early blackjack counting systems, and figured out how to beat the game of roulette (as crazy as that sounds). He was also one of the first stat arb guys, figuring out how to price warrants and making a killing for the UC Irvine retirement fund.
Also, if you haven't heard of the Kelly criterion, I think it'll basically blow your mind. I think it's the least appreciated house edge there is, and a very cool piece of math.
Thorp is pretty interesting. With Claude Shannon he invented the first wearable computer:
"It's with Shannon that Thorp would revisit a question he had considered years earlier: whether he could apply mathematics to beat the game of roulette as he had done with blackjack. Thorp and Shannon would develop a friendship and, in the process of answering that question, build what is widely regarded to be the first wearable computer."
http://www.engadget.com/2013/09/18/edward-thorp-father-of-we...