On Thu, Jan 19, 2012 at 1:39 PM, Jacques Basaldúa <[email protected]> wrote:
> > I don't disagree with any of this. I probably made it seem > irrational by**** > > > my description and to be sure humans usually are quite irrational when it > **** > > > comes to these kinds of tradeoffs, but there is also an element of > common**** > > > sense that is very important. **** > > ** ** > > This problem is well known as the "marginal utility of money". It is clear > that the correct answer depends on your income as the rational decision is > maximizing utility, not money.**** > > ** ** > > E.g. Choice between:**** > > ** ** > > 1. $10 for sure**** > > 2. 1 in 20 of winning $500**** > > ** ** > > Most people would chose 2 since the expected value is 2.5 times more than > 1. ($10 is "nothing", $500 is "something")**** > > ** ** > > but if you multiply by 100,000**** > > ** ** > > 1. $1 million for sure**** > > 2. 1 in 20 of winning $50 million**** > > ** ** > > Most people would take 1, (19 chances in 20 of "losing" the million) but a > billionaire would probably prefer 2 ;-) > Exactly. This is STILL risk aversion however, it's just that risk is not just a money thing, it involves many factors. > **** > > ** ** > > Jacques.**** > > _______________________________________________ > Computer-go mailing list > [email protected] > http://dvandva.org/cgi-bin/mailman/listinfo/computer-go >
_______________________________________________ Computer-go mailing list [email protected] http://dvandva.org/cgi-bin/mailman/listinfo/computer-go
