On-line algorithms service sequences of requests, one at a time, witho
ut knowing future requests. We compare their performance with the perf
ormance of algorithms that generate the sequences and service them as
well. In many settings, on-line algorithms perform almost as well as o
ptimal off-line algorithms, by using statistics about previous request
s in the sequences. Since remembering such information may be expensiv
e, we consider the use of randomization to eliminate memory. In the pr
ocess, we devise and study performance measures for randomized on-line
algorithms. We develop and analyze memoryless randomized on-line algo
rithms for the cacheing problem and its generalizations.