3 ms·
From the lens of behavioral economics (e.g., cumulative prospect theory) is there a situation where somebody can accurately understand the expected outcomes of
by parpfish 3y ago
From the lens of behavioral economics (e.g., cumulative prospect theory) is there a situation where somebody can accurately understand the expected outcomes
of any particular bet BUT still come to the conclusion that taking the bet is rational?
If there's some combo of a floor effect (if they don't have much now, they don't have much to lose) and pessimism about the future (they think this is the only way they can manage to get ahead), I can see people deciding that gambling is worth it.
- semanticjudo 3y agoyes, when the odds of winning are in my favor... But I assume you know that so you must be asking, "Is there a situation where somebody can accurately understand the expected outcomes of any particular bet where the odds are against them winning and still come to the conclusion that taking the bet is rational?" And one answer comes immediately to mind although I'm sure there are several: when I'm willing to lose for the entertainment value of having the chance to win and knowing that short term variance means I may in fact win.