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.
It's always the same machine, even if you move it from one day to the next? Hmmmm, lemme think about it. nitro
I am assuming this is a mathematical problem and has nothing to do with the complex dynamics of the machine, where perhaps the construction of one machine (it's initial conditions upon construction) causes it to have a different attractor than the rest. If you had said that one (not necessarily the same) of the fifty always has 25% more winnings than the rest, I would not be surprised. But the SAME machine, even if you move it ? Crap, this is probably an easy problem, but now I can't sleep. nitro
Ok I didn't post this with the purpose of stumping everyone - no joy in that, and one of my beefs with these kinds of problems is that they are oftentimes purposefully stated in such a way as to mislead in advance of the problem solving process. So, if I had a beef with the way the question is stated it would be the line "they are all the same in function." IMO this is a false or, at best, misleading statement that all but prevents audiences from solving the problem and thus makes the questioner look clever. So here is a clue to make the question more fair, IMO: By all appearances to a slot player the machines function the same, and all the payouts should, over sufficient time, be exactly the same. But the machines do not absolutely function the same. The critical difference between the one and the other 49 was built in or designed in by the manufacturer. Yes, it will have the exact payout as the other machines and look exactly like the other machines, but it should always 'earn' more at the end of the day, regardless of where it is placed relative to the other machines. Ok, that is the best I can do. I would think that sharp traders that are up on their psych and behavioral science might have a stab at solving this off the cuff. Or, go play the slots for a few minutes while thinking about this and it might come to you. I'll post an answer in 24-48 hours unless someone solves it sooner, at which point I'll just come clean.
You are halfway there Nitro - sorry I didn't notice that sooner. Yes, the initial conditions upon construction cause one machine to be more attractive than the rest. So, I will leave the question open: What condition is different that makes the one machine more attractive and thus more profitable?
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.
I like MrSub's answer. Given the information we have, (payout is same percentage wise, and looks are the same), then mathematically the only way the machine could make more is to get more play. Attractive graphics could help, but that has been eliminated. The shorter spin as Sub suggested could create more play. The only other thing that readily comes to mind is the "announcement" of payout pulls. A louder bell, a siren, whatever could attract more players to be drawn to the machine. Unless I read the problem incorrectly, more play is the only way this machine can make more money. How this has anything to do with trading I am not sure. Doing larger size? The only thing I can think of that would work perfectly would be to always have a scantily clad beautiful young lady shilling at each of the machines on either side of the machine in question. That would, I imagine, create more play all the time on that one machine. peace, rs.