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Mathematics

Optional Stopping Theorem and Fair Game Paradoxes

Quick fact

In a fair game, even if you use a clever stopping rule to 'quit while you're ahead,' your expected winnings are still exactly zero — you cannot outsmart a fair game. However, this only holds if your stopping rule has a bounded horizon or other technical conditions; otherwise, you can encounter paradoxes like the St. Petersburg lottery.

Why this is interesting

Imagine a perfectly fair coin flip where you win $1 on heads and lose $1 on tails. Surely you can't beat it... but what if you decide to stop after you're ahead by $1? Does that guarantee you walk away a winner?