Core Concepts
Two-armed slot machines exhibit the Parrondo effect under specific strategies.
Abstract
1936 Mills Futurity slot machine, Parrondo effect, Ethier and Lee's conjecture on fair games, casino profitability, random-mixture strategy C, nonrandom periodic pattern strategy D, mathematical proof of conjecture.
Stats
The 1936 Mills Futurity slot machine had a feature where 10 consecutive losses resulted in a return of lost coins.
Ethier and Lee studied the generalized version with J replacing 10.
The authors proved the Parrondo effect for a two-armed machine with the Futurity award.
Casino profits in the long run using random mixture strategy C were demonstrated.
Nonrandom periodic pattern strategy D was analyzed for different patterns with As and Bs.
Quotes
"The law of inevitability behind casinos is determined by the 'law of large numbers' in probability theory."
"Parrondo’s paradox arises when two fair games are combined into an unfair game through random or conditional non-random combinations."
"Ethier and Lee showed that under random-mixture strategy C, the casino can always make a profit in the long run."