baccarat, random walks, solving an old problem, and the central limit theorem
The baccarat problem got me thinking about the random walk problem, because each of the three times in my game I reached the $200 betting limit my revenue became a random walk. At this point the problem was: which was going to come first, was I going to get into the black on $200 bets or was I going to burn through all of my cash? This is a random walk: my revenue bounces back and forth, an approximate 50% chance of each, and the game ends when I reach either of two targets: $200 above where I started (between $5000 and $6000) or $0. Many years ago, I can't remember when, I encountered a problem in random walk probabilities which was: suppose a robot, starting at x = 0, steps either in the +1 direction or the -1 direction, at random, for infinite time. What is the probability he never returns to 0 after his first step? Wow -- this is a heady problem. It always seemed to me the probability was zero: surely in infinite time he has to eventually reach all points of finite x. ...