The game was not a lesson and this page is not a set of answers. It is a list of
places to go digging, if any of those six questions has stayed with you.
One thing worth knowing before you start: what you watched — the crowd's average climbing while
your own money sank — is called non-ergodicity. The average across many people and the
average across one person's lifetime are different numbers, and most calculations you will ever
meet quietly assume they are the same. That single word will open every door below.
WORDS TO SEARCH
If you only take one thing away, take these. Any of them will open the door.
ergodicity economicstime average vs ensemble averagenon-ergodicKelly criteriongeometric meanvolatility dragJensen's inequalitygambler's ruinGibrat's lawthe flaw of averages
The chapter on ergodicity is the clearest short statement of why surviving matters more than averaging. The rest of the Incerto — Fooled by Randomness, The Black Swan, Antifragile — circles the same idea.
What to actually do about it. Why something that loses money on average can still make you richer over time — the insurance question, worked out properly.
Free, book-length, and updated. The technical route if you want to work through it properly.
None of this is settled. Plenty of economists argue that this is expected utility theory
restated, and that the maths was always there in Bernoulli and Kelly. They have a point worth
hearing. What isn't in dispute is the arithmetic you just watched happen.