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You should be worried about going bust, because life goes on after the exercise ends. Am I missing something?
by kartickv 9y ago
You should be worried about going bust, because life goes on after the exercise ends. Am I missing something?
- deleted 9y ago[deleted]
- jonahx 9y ago> Am I missing something? No, you're just bringing up a separate issue from the one implied by the parent. Your own risk tolerance, the values of your life, the opportunity costs outside of this one -- those are real complexities but we ignore them to answer a question about how best to maximize your bankroll within the current situation.
- darkerside 9y agoThink of it this way. With one final chance left, you should really bet 100% to maximize your expected value.
- goldenkey 9y agoThat seems contrary to the criterion... Expected value dismisses risk and the fact that once someone loses their money, it is much harder to gain it back. If you have 100 dollars..and you lose 50% of it on a fair coin bet, you now have $50. Say you play again..You win. Youll only have $75 ($50 times 150%.) Thats the basis of risk analysis. That losing and winning arent equal for finite bankrolls just because their probabilities are equal.