Positive expected value means I should take the bet every time

Back to list2026-06-22
You

Positive expected value means I should take the bet every time?

ChatGPT

Only if you can survive the variance. Repeated multiplicative bets are governed by the geometric mean, not the arithmetic one:

\[g = \prod_i (1 + r_i)^{p_i}\]

A bet with positive arithmetic expectation can still have \(g < 1\), which means certain ruin over enough repetitions. That is the whole content of the Kelly criterion.

You

How long should a random id be to avoid collisions?

ChatGPT

Use the birthday approximation: collisions become likely around \(\sqrt{N}\) draws from a space of size \(N\). For a 64-bit id that is about 4 billion items, for 128 bits it is beyond anything you will generate. The practical answer for most systems is 128 random bits and no coordination.

You

A test is 99% accurate and I tested positive. Am I 99% likely to be ill?

ChatGPT

No, and the gap is the whole point of the rule:

\[P(D \mid +) = \frac{P(+ \mid D)\,P(D)}{P(+ \mid D)P(D) + P(+ \mid \lnot D)P(\lnot D)}\]

With a prevalence \(P(D) = 0.001\) and both error rates at 1%, this gives roughly \(0.09\). Nine percent, not ninety-nine, because false positives are drawn from a pool a thousand times larger.

You

What would you skip entirely?

ChatGPT

The reporting layer, until something forces it. It is the part that feels productive to build and the part nobody opens twice.