Playing the HI-LO Game: A Statistical Evaluation

In the basic version of HI-LO - a game used in many gaming machine applications - a series of random integers are generated in a given range. A player has to decide in advance whether the next number will be higher or lower than the last. An initial stake is made. If the player guesses correctly an award is made otherwise the player loses the stake. This sequence continues over a number of rounds - with increasing awards until the player loses, wins or quits. The statistical properies of HI-LO are explored here and appropriate theory developed. A corresponding series of EXCEL-based macros enable an analysis of payoffs for any HI-LO game to be undertaken across a range of contrasting playing behaviours - and provide an automatic facility for cost out new games developed for the leisure infdustry.