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I wouldn't, because I can likely pay off my mortgage without it and still have money left over for some toys. My mortgage isn't a big burden. But I can understa
by BeetleB 4y ago
I wouldn't, because I can likely pay off my mortgage without it and still have money left over for some toys. My mortgage isn't a big burden. But I can understand it for folks who can't save much due to a mortgage.
The problem with the scenario is that the disparity is so high: $1M vs expected value of $25M. 50% is high enough that for people like me, it's clearly a green button option.
But how about this:
Guaranteed $1M vs a 4% chance of winning $50M. Now the expected value is $2M - still a lot higher than $1M. But ... 4% chance? Suddenly the guaranteed $1M is a lot more attractive.
- ghaff 4y agoThe utility function, and to some degree, attitude towards risk is going to differ a lot among individuals. And I imagine that among those reading this here, some are probably going "A million is a nice sum but it's not really life changing whereas $50 million would let me retire right now." And you can scale the numbers up or down and at some point almost everyone will choose red or choose green respectively.
- im3w1l 4y agoIronically 50 million would make me want to hire people to realize my visions, pulling me out of retirement.