4 ms·
One way to think of it is in terms of the expected value of betting on being correct. Even if the bet only happens once ever, I still need a way to map how conf
by jamii 10y ago
One way to think of it is in terms of the expected value of betting on being correct. Even if the bet only happens once ever, I still need a way to map how confident I am to how much I think the bet is worth. If I am willing to pay up to $0.73 for a bet that pays out $1 when I'm correct then I am 73% certain.
- smallnamespace 10y agoTechnically that's true only if you're risk neutral, but we define risk aversion in terms of probabilities, so you can't avoid a circular argument.