Part 2/8:
For example, if the first flip is heads and you now hold $100, after the flip, you would have $180. If the next flip is tails, your balance would drop to $90.
Theoretically, with a 50% chance of gaining 80% and a 50% chance of losing 50%, one might assume that players would experience a 15% average gain per coin toss. This attractive statistic beckons participation, but the underlying mechanisms yield surprising outcomes.
A Million Simulations
To better understand the implications, imagine a simulation of one million participants each playing 50 rounds. The results, displayed in graphical form, reveal an exponential growth in average wealth, yet the median and mode—the values representing the midpoint and most common outcomes—plummet to a mere $7.20.