You can still reason about expected value in this situation, just $ is not really what you want to optimize for.
When you view it as “100% chance of being able to afford anything” vs “50% chance of being able to afford anything” it becomes more clear.
Marginal value of money at 10T is almost zero.
Meanwhile, you ask a near trillionaire to pay even 10% taxes and they act like you’re actively breaking their legs and throwing them onto the street to starve.
You see the expected value fallacy thing pop up in real life when the lottery hits big digits. “Did you hear? The jackpot is over $1 billion! Let’s go buy tickets.”
Let’s be real, after $100 million, or honestly even $10 million, increasing the jackpot doesn’t change how much effect that money has on your life very much. At that point, likelihood is a lot more important.
But every time the jackpot peaks, it’s like all of these intelligent, thoughtful people around me lose their ability for rational thought. Why would you buy a lottery ticket now, but not when the jackpot was $500 million a month ago?
At least some of them are just having fun with it, they don’t really expect to win anything.
The set of things I can do with 20T but not 1T is very small
It really helps if you define “value” in a material sense, rather than an abstract numerical figure.
The utility of money has a diminishing return at extraordinary volumes. But I could see a contrary scenario:
You are broke. You can receive:
-
Half the money you need for a life saving operation.
-
A 50% chance for all the money you need.
- Half the money you need for a life saving operation, and a shiny button
-
Will you give this opportunity to 100 of us? Because we will be pooling our wins. If so, the latter, if it’s just me, the former.
Game:
This skill has a 50% chance to deal a critical hit, or completely miss!
“You mean, critical hits which deal something like 30% extra damage?”
I actually like it when games do that sort of thing, keeps you on your toes, shoutout to Backpack Battles
I feel like it is usually logical though lol. This is kinda the one situation where it’s not because you don’t really need more than 10 million anyway.
Unless you really wanted that button.
Risk intolerance is logical. EV modeling does not take that into account, which is the joke here.
This would apply to any situation where the lower value is sufficiently “enough” and the odds are better. Once you cross the threshold of enough, taking worse odds for more is nonsensical.
Imo in any situation where you are choosing risk/reward preferences it’s important to consider how much different levels of reward will actually benefit your life. I think in most cases losing everything you own is going to be more bad than doubling your wealth is good, and so it’s a bad idea to only consider the alpha of an investment. Or it could be the other way around, maybe someone desperately needs to escape their shitty job, so for them a very risky investment that actually has lower effective value than the safe investment is the more rational choice.
Which isn’t to say discount EV entirely, that’s how you end up at bad decisions like buying a lottery ticket.
EV is meaningless in any situation where you only get 1 chance.
It only becomes relevant if you repeat something enough for the law of averages to work out
Do you take a guaranteed $1 or 50% chance at $10? Suddenly EV is meaningful.
depends on where the ten trillion came from.
directly from a bunch of people’s lost wages?
stolen from a casino?
mafia?
a single trillionaire who stole wages?
several billionaires who also stole wages?
a family of entitled brats?
trillions of dollars is dirty no matter how you slice it.
It’s a genie so it just enters circulation into your bank account and hopefully doesn’t start a cascade of hyperinflation 👍
a genie? where’d this genie come from?and how is he getting the money?
Jinn are slaves, you’re benefitting from slavery. Did we not watch Aladdin as kids or something?
This isn’t even the original questions I’m asking ffs. What the hell is this in response to? I’m not the one invoking jin here. Not even the original post we are responding to invoked genies so I have no idea what this slop is about.
Are you and the above poster AI bots that got lost and don’t understand how conversations work??
None of this answers my original questions. Enjoy my ignore list you AI slop generators.
if the thing giving the choice was considered trustworthy by lenders it might be possible to trade the 10T ev for 5T guaranteed.
