Robert C. Hannum

The mathematics and marketing of dead chip programmes: finding and keeping the edge

A general perception exists among casino executives that the premium players contribute a disproportionate share of profits. Consequently, to attract and retain high‐end customers, many casinos are using ‘dead chip’ programs and other incentives. Dead chips are non‐negotiable chips that are not exchangeable or redeemable and cannot be used for any purpose except to gamble. Very often the result of such a program is to reduce the effective statistical advantage of the house on games played. This article provides a mathematical framework to determine the effective house advantage under dead chip programs with applications to a variety of games and discusses the marketing and management implications of dead chip programs in light of these results.

On Measuring Intergroup Inequality

This article develops an alternative measure for use in comparing two income distributions. The measure builds on the argument that under certain conditions inequality and dissimilarity are not the same thing, and this difference can be used to develop a measure of “crossover.” As far as we know, no analyst has developed a statistical measure that can determine the size of crossover (overlap) between two cumulative distribution functions. The measure is then applied to racial income distribution data in the United States. The results show some of the “styles” of crossover that vary from bottom-up to top-down patterns. We argue that the overlap information generated by this measure can provide insight into who benefits by trends in intergroup convergence that is not gained when using existing intergroup inequality measures.