3 ms·
> there isn't a distinction between positive expected value financial games, versus negative expected value financial games except cultural tolerances Why not?
by thomasahle 6y ago
> there isn't a distinction between positive expected value financial games, versus negative expected value financial games except cultural tolerances
Why not? positive expected value games seem like a much better thing to post your money into.
- vmception 6y agoOh because they are just as much gambles as the other, there are several cultures that require a distinction between gambling and investing, and many cultures that don’t and won’t try to rationalize it just so they can sleep at night. The only reason positive expected value financial games exist is because there exist certain external cases that make them profitable almost all the time, such as inflation. But if your trade isn't sticking around for that, they aren't inherently positive expected value. I have pity for the people that feel they need to split hairs over this.... while paying for insurance.
- throwaway2245 6y agoA national lottery with a positive EV would still make almost all players losers.
- thomasahle 6y agoIf you play at enough such lotteries with small enough bets, that sounds great. If the EV had been negative, not so much.
- throwaway2245 6y agoIf you have high enough wealth and the reliable ability to replicate your bet a sufficient number of times, then you might be able to reduce the variance enough to see the benefit: right. If you're not in that position, then you're gambling just the same, whether you have -EV or +EV.