Now that the contest has closed, I'll submit my analogy.
You're sitting by the side of the road where you can watch cars coming
over the top of a hill one at a time. You see a red car, then a black
car, a white car, a blue car, a black car, followed by the colors:
Red
Blue
Black
White
White
Black
Green
Silver
Wow! There's an obvious pattern here. Every third car is black.
Therefore, since there have been two cars since the last black car we
can confidently predict that the next car will be black. We might even
offer 2-to-1 odds on a bet that the next car will be black.
If the next car happens to be black, the confidence in the pattern is
reinforced, and we might offer even bigger odds on the third car coming.
Does that sound like a sound bet?
If it's not black, we might think, "Oh, oh, the pattern is changing,
I'll have to look for the new pattern." At some point in time, the
pattern will be broken. So what happened? Just as we tried to benefit
from the pattern by betting on it, we lose. Similarly, if we are playing
video poker and try to predict what cards will come on the draw and
deviate from the strategy, all that we do is reduce the expected value.
Frank, would I have won the contest?
Dan Paymar
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