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The first example has a miscalculation; if you invest 1k and the EV is 900, then your choice has negative ROI, not positive.
by greenfish6 1y ago
The first example has a miscalculation; if you invest 1k and the EV is 900, then your choice has negative ROI, not positive.
- quirino 1y agoThe calculation that arrives at 900 has already subtracted the 1000 from the start.
- breischl 1y agoHe's calculating EV above cost. If you look at the calculation, the first term is -1000 to account for the initial investment. So the final value is tell you that you got back the initial money plus 900 more.
- neom 1y agoHowever, the article is technically inconsistent in framing.
- postflopclarity 1y agoit's correct. the EV is 900 after accounting for the 90% probability of -$1000. that's what the first term in the sum is for.
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