Managing Risk In 4-Digit Number Games

Event Details
  • Date/Time:
    • Monday December 10, 2001 - Sunday December 9, 2001
      10:00 am - 11:00 pm
  • Location: ISyE 217
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    N/A
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Contact
Barbara Christopher
Industrial and Systems Engineering
Contact Barbara Christopher
404.385.3102
Summaries

Summary Sentence: Managing Risk In 4-Digit Number Games

Full Summary: Managing Risk In 4-Digit Number Games

The four-digit number game is a popular game of chance played in
South East
Asia. The players in this game choose a 4-digit number and place their bets
on it. In this paper, motivated by a real application, we study the design
of a good control mechanism for
managing the bets in this game. Our objective is to design a control
mechanism to decide whether the bets should be accepted or rejected.
We
propose a non-linear optimization model for this problem and provide the
mathematical justification for the control mechanism used by several
operators in this region. We also suggest a simple improved control
mechanism. Using data provided by a company in the region, we show that our
control mechanism can accept more money per draw, while the risk exposure of
the proposed mechanism can be
considerably smaller than the current system.
This is joint work with Leong Siew-Meng (NUS).

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H. Milton Stewart School of Industrial and Systems Engineering (ISYE)

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Status
  • Created By: Barbara Christopher
  • Workflow Status: Published
  • Created On: Oct 8, 2010 - 7:43am
  • Last Updated: Oct 7, 2016 - 9:53pm