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You're looking at this after the fact though. Imagine 2 scenarios for a corporate chef in San Francisco, who expects his next job to last 10 years: 1) He goes
by mathattack 13y ago
You're looking at this after the fact though.
Imagine 2 scenarios for a corporate chef in San Francisco, who expects his next job to last 10 years:
1) He goes work at Safeway, and earns $60K.
2) He goes to work at Google, and earns $50K with a very high risk lottery ticket that has an NPV of $200K, or $20K/year. (Say 1 in 100 shot of getting $20 million, or use Black-Sholes on an option)
Who are we to begrudge him if #2 pays out? The company does it because it's better for them than getting more VC money to pay the extra $10K.
For the chef, it's a better deal than Vegas, Lotto, or the options market.
- ryandrake 13y agoI don't think I'm begrudging anyone, and I'm not going to dispute the math behind expected value. Without passing judgment, objectively, he deserves his payout as much as a lotto winner deserves theirs, as much as any net-positive-EV speculator deserves theirs, since the act of picking a startup is similar to that of picking lotto numbers. Once we agree on that, we can debate whether lotteries are a great way for our economic system to allocate wealth.
- mathattack 13y agoI think we're on the same page. It may or may not be, but shouldn't people be free to choose to enter a lottery? (Assuming there isn't fraud on the chances)