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Most people have some risk aversion. For example, few people would trade $10 million for a 10% chance at $100 million.
by jacoblyles 16y ago
Most people have some risk aversion. For example, few people would trade $10 million for a 10% chance at $100 million.
- rokhayakebe 16y agoInteresting. I am assuming you would. Can you briefly explain your reasoning?
- marvin 16y agoUnless you really, really need 100 million, no reasoning will make that a good bet. The expected value is 10 million, and since that's what you're putting at stake, you have nothing to gain. Whereas the utility value of a guaranteed 10 million, assuming you're not very rich already, is huge. It's more than an average lifetime of hard work.
- cperciva 16y agoTrue, but it's probably not a good idea to tell your girlfriend that.
- nwilkens 16y agoIf determination could increase your chance, then you may be better going for $100 million. Otherwise take $10m.