Re: Satoshi Dice -- Statistical Analysis

Perhaps I should have asked instead, how many trials would it take to theoretically reach 1.9% with a 95% confidence interval?

Well alright. Now I can say "I don't know" instead of "your question sucks"

It's affected a lot by the big bets. The profit from thousands of small bets can be wiped out by a single lucky big bet (and vice versa).

The question should have one more number. It should be phrased "95% chance that the house edge will be within 1.89-1.91%" or similarly. The size of the acceptable error there will greatly influence the result.
And... I don't remember how to do a problem like that Cry

It's complicated by the fact that with 1 trial, there is a 0% chance that the house will take within 1.89 to 1.91 percent.

I think it can be assessed using Markov chains. Meni Rosenfeld's analysis of PPS pool bankruptcy probabilities (AoBPMRS, Appendix c) examines a similar problem and uses a Markov chain model. I haven't studied them, maybe someone else more familiar with Markov chains could do the analysis.