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Ergodicity Economics: A Primer
- deleted 6y ago[deleted]
- brudgers 6y agoPeople's natural risk aversion is rational. Checks bounce. Companies go bankrupt. Things that sound to good to be true often are. It is entirely reasonable to discount potential returns for that risk. Or to put it another way, the model doesn't conform to reality in a fundamental way because it mischaracterizes the way money works.
- quantified 6y agoIt’s rational to avoid the bet. The proportion you stand to lose is more than you stand to gain. +50% and -33% would balance out. Interesting that some simulations were picked that showed growth at all, I’d expect net growth would be negative in most simulations at any point.