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R
Rex Dinero

let's scale it up to richer people levels. guaranteed $50 billion or 50% chance at $1 trillion. are you really taking the chance because it's a higher EV and potentially giving up having $50 billion?

4430
R
Rex Dinero

in reality, even if everyone were fully informed of finance and ev math and all that, i think nearly everyone would still have a breakpoint where they take the guarantee over the chance and that breakpoint is probably directly related to how much wealth they already have.

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5 прямых ответов · 6 сообщений

ellie maybe 🌑

You can also reduce it further for a similar discussion: ask someone sleeping on the street if they'd rather have $65 now or a 50/50 shot at $1,000. In a vacuum, the gamble is the rational choice. When you're struggling to survive, survival is the rational choice.

Ответ для ellie maybe 🌑
ellie maybe 🌑

Maybe Will doesn't think it's smart, but I've been in scenarios where I'd rather have a lifejacket than wait for the rescue boat.

Barrista

This is why the St. Petersburg lottery paradox breaks

HorseHalves

My question is how many people who answered make under 50 annually.

M. Korhonen

People are not homo economicus. This has been demonstrated again and again and loss aversion is one of the foundings. news.uchicago.edu/explainer/wh...

Behavioral economics, explainedShaped by Nobel-winning UChicago economist Richard Thaler, behavioral economics examines the differences between what people “should” do and what they actually do—and the consequences of those actions...news.uchicago.edu
E
EAll

I think the curve on the original one probably does reflect some innate bias, but it is true that wealth has decreasing marginal utility and this weighs on a decision to take the benefits of the sure thing as "enough."