How to play betting games
I took a quant trading firm's assessment recently, and I just don't know how to approach the "bet up to a 100 on this team vs the other team" questions. Each team had betting odds and a probability of winning.
Like Team A has an 80% chance of winning with betting odds 4:1 and Team B has a 20% chance of winning with betting odds 7:3. (Not sure about the actual numbers). Wouldn't this just be an optimizing expected value problem?
Google Kelly criterion. But no, it's not a "maximizing EV" problem. (Or rather, you want to maximize your logarithmic EV to max the expected compound growth rate).
Maximizing "normal EV" on a +EV bet will always mean risking your entire bankroll. This is dumb, since if you lose the bet, you miss out on opportunities to make future +EV bets.
This is exactly right. I think adding that there is a possibility for discrepancy between the given odds and the actual odds of a given scenario... thinking in terms of sports can make this easier. A 1:1 payout would indicate that the teams are evenly matched (assuming there is zero VIG).... but if you have a model that predicts that the odds are different than that, you would have an even higher EV.
I don't even know
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