5 ms·
I think this answer misses the point, which is that this information is only a weak predictor of the problems you describe, thus must be discounted accordingly.
by DavidSJ 7y ago
I think this answer misses the point, which is that this information is only a weak predictor of the problems you describe, thus must be discounted accordingly.
- mlyle 7y agoHow do you discount "personal catastrophe" appropriately, though? Surely the volatility in outcomes is very important, and not some simple expected value. A 5% chance of my house burning down is much more costly to me than 5% of the economic cost of my house burning down. Indeed, there's not really a (reasonable) discounted price I will take for a chance of my house burning down. Of course, this kind of aggressive avoidance of risk is exactly the thing we are annoyed with the employer for... But most employers do not have their eggs in one basket to the extent that someone returning to their career from a gap does.
- DavidSJ 7y agoYou normally wouldn’t discount linearly. But that doesn’t mean you can’t put a price on it. There’s a limit to how much you’d pay for insurance, for example. Some risk is part of life.
- mlyle 7y agoI didn't say one can't put some price on it. I said "maybe a huge amount" in comparison to someone saying that perhaps one would value it at $5k. $5k this year is small compared to future potential career earnings; not much of a difference in probability of losing those is required to far exceed $5k. Just strict linear expected value could be bad, let alone when one weights the risk and volatility.