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How SBF is described as acting in this case as absolutely not rational if he was actually trying to maximize his expected number of dollars, there's going to be
by Vecr 3y ago
How SBF is described as acting in this case as absolutely not rational if he was actually trying to maximize his expected number of dollars, there's going to be an optimal set of trades you can make with the finite number of dollars you start out with, and it's not going to be slamming your head against a single bet that's getting less and less attractive as you get deeper into the conditional probabilities. Make a single "good" bet (like SBF claimed to have done here) if you want, but use the rest of the money for less correlated bets that at least aren't strictly conditional on the first bet going well to have any utility at all.
- sdwr 3y agoAfter letting the anecdote percolate for a bit, none of it makes sense. The idea that the other person is getting more and more humiliated, as their losses go from 98 dollars to 99 to 99.50 doesn't really track.
- Vecr 3y agoMaybe loss of money is very closely linearly related to humiliation for SBF, but it is not for most people. That's the least confusing part of the story to me.
- legalbeagle 3y agoThis course of action (taking a small risk of losing everything in exchange for a high probability small reward) is what Nassim Taleb calls "picking up coins in front of a steamroller."