Why did the (former) Jeopardy champion end his streak with a meager $1,399 wager?

Answer: Pure game theory … perfectly executed..

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Well, it finally ended.

James Holzhauer– the 34-year-old professional sports gambler — was dethroned by librarian Emma Boettcher.

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Boettcher was quick on the buzzer (and James seemed uncharacteristically late-triggered), she answered all of her questions correctly and she she had some luck — hitting both Daily Doubles in the double Jeopardy round.

Bottom line: she deserved to win.

A major conversation piece from the game was Holzhauer’s measly $1,399 wager in Final Jeopardy.

I can explain that…

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In all prior games, Holzhauer became notorious for HUGE bets — often going “all in”.

So, why a paltry $1,399 wager in Final Jeopardy.

Here’s a game theory-based explanation …

Going into Final Jeopardy, Boettcher was leading Boettcher $26,600 to $23,400.

Boettcher  was playing to win … and had to assume that Holzhauer would go all in with his $23,400 and would answer correctly.

That would give Holzhauer $46,800.

So, in order to be assured a win, Boettcher needed to bet $20,201 — which she did.

And, she answered correctly.

Adding that to her  $26,600 going into Final Jeopardy gave her $46,801 … and an assured victory.

Holzhauer had to recognize that scenario and assume that his only hope was that Boettcher would miss the Final Jeopardy question.

So, Holzhauer had to play defensively against Jay Sexton — the third player (who was also very good).

Sexton went into Final Jeopardy with $11,000.

He could have bet it all … and if he had answered correctly, would have doubled his total to $22,000.

Here’s where things get interesting…

Holzhauer knew that he wasn’t assured victory if he answered correctly, regardless of his wager. He needed to have a Boettcher miss to stand a chance.

He probably figured that if Boettcher missed the Final Jeopardy question, he might miss it, too.

So, his wager was designed to “insure” himself against the scenario of Boettcher missing the question (Holzhauer‘s only hope) … with Sexton going “all in” and answering correctly.

By betting $1,399 … if Holzhauer had answered incorrectly, his final total would have been $22,001 … just enough to still edge out Sexton … if Sexton had bet the ranch and answered correctly.

Makes perfect sense, right?

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Holzhauer‘s final bet was a brilliant application of game theory.  Something that he had to do — in his head — in less than 1 minute.

For comparison, I had to sleep on the question, use a paper & calculator … and it took me about 15 minutes to do and check the calculations.

That guy is good … I sure wouldn’t bet against him.

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One Response to “Why did the (former) Jeopardy champion end his streak with a meager $1,399 wager?”

  1. Gman Says:

    And Holzhauer will have to give about half his winnings to the government including 14% in CA state income tax because he won the money in CA. SMH.

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