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I still don’t get it how hitting the green button (50% at 50 mullion) is the “rational” choice, it isn’t. 1 million in your pocket, no matter what, is exponenti

I still don’t get it how hitting the green button (50% at 50 mullion) is the “rational” choice, it isn’t. 1 million in your pocket, no matter what, is exponentially and life-changing (for the majority of us) better than a 50% of getting nothing. Maybe if the value behind the red button would have been smaller (let’s say $1000 or even $100) then things would have been different, but, again an $1 million in one’s pocket no matter what is life-changing for most of us.

compiler-guy 4y ago
On a pure, simplistic, naive, reading of expected value it is the “rational” choice because $25 million is more than $1 million. The author’s point is that the simplistic understanding of expected value isn’t always wise. The audience is economists who use the economic equivalent of perfectly spherical cows and then wonder why their model isn’t all that good.