4 ms·
Somewhat similar thought experiment I like to ask: if you could have either a guaranteed $1M or a random amount between 0 and $5M, which would you choose (and w
by tempestn 10y ago
Somewhat similar thought experiment I like to ask: if you could have either a guaranteed $1M or a random amount between 0 and $5M, which would you choose (and why)?
Then, what would the high end of the second range need to be to get you to change your mind (assuming the low end is fixed at zero)?
- rezashirazian 10y agoI would pick random number between 0 - 5M I'm not in need of that much money, so the 1 million guarantee is not valuable enough to me to offset the fact that I would have 50%+ chance of getting something more than 2.5 million. high end of $2,100,000 on the second case is enough for me to switch to the second one.
- MengerSponge 10y agoWhat's your "sure bet" threshold? That is to say, either X guaranteed dollars or random(0,5M)? 500K? 100K?
- tempestn 10y agoBased on your parent's response, one would think $2.5M
- MengerSponge 10y agoReading comprehension is hard :p
- LeoPanthera 10y agoThe answer to this probably depends on how much money you already have. If you're poor, you probably wouldn't want the risk and would choose the 1M. If you're already comfortable, the random amount has a better expected return.
- tempestn 10y agoThat's what you would expect, yes. What has surprised me so far is how weighted the responses I've received are toward the guaranteed 1M, even among people with plenty of money. I guess another interesting question instead of adjusting the range of the random outcome would be to scale the whole thing. Say you'd take the million. What about 10k vs 0-50k? My expectation is that the responses would be more consistent (ie less dependent on size relative to net worth) than you'd think.
- YCode 10y agoHit F12 and throw a Math.random()*5000000 to find out if you made a mistake!
- antisthenes 10y ago> 4968357.576506847
- loco5niner 10y agocan't get much better than that
- tempestn 10y agoHappy with mine too: 4557693.79
- loco5niner 10y ago3213268.6911259987 I'm ok with this :-)