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Actually EV "makes sense" even when applied only once. You should take any positive EV gamble you can at any time you can, and avoid the opposite. Life is a se
by mattmaroon 16y ago
Actually EV "makes sense" even when applied only once. You should take any positive EV gamble you can at any time you can, and avoid the opposite.
Life is a series of one time decisions. You might not get the same exact gamble again, but you'll get many others, and if you keep taking ones with positive expectation you'll end up ahead in the long run.
- Dn_Ab 16y agoI see your point. But I would say maximize your utility but even that is questionable. As Daniel Bernoulli (St. Petersburg Paradox) showed, the concept of expected value to the real world is not straightforward. Short of it is: I don't agree. Those other situations are not the same event as this and even often completely unrelated. You cant lump them into the same space and claim positive expectation on their value.
- mattmaroon 16y agoLet me put this another way. If you take every suitable gamble you can, even if they're one time deals, you'll end up further ahead in the long run than the guy who only takes suitable gambles that are repeatable. Thus whether or not the gamble is repeatable should have no bearing on your decision. (I'm using the term suitable somewhat vaguely here, since even +EV gambles can be bad ideas in the long run due to bankroll considerations. But for what we're talking about, we're assuming all the gambles are the same in all other respects.)