>>The simplified model would claim that you should play the game because the expected value is positive. No, it wouldn't. Humans are not maximizing EV of money

>>The simplified model would claim that you should play the game because the expected value is positive. No, it wouldn't. Humans are not maximizing EV of money won but utility of that money. This is fundamental to economic models which Taleb is criticizing. >>All that complexity is lost if you only think in simple terms of expected value and single-iteration games. It isn't lost unless you are for some strange reason maximizing expected amount of money which no one sane does (even people who don't understand what expected value is in the first place). If the game is single iteration or multi-iteration doesn't matter either, you just make the best play at every point and it doesn't change no matter if you will get a chanc to make another bet or not.