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The infamous coin toss

ergodicityeconomics.com

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Re: The infamous coin toss

#131

Post by LeonB »

Swenrekcah wrote: post #111
LeonB wrote: post #104

Earlier quoted context omitted.

I believe you, but it’s just incredibly naive. If “all things were equal” and there were no assumptions and we were all starting at an equal position there “may” be some merit in this position. But that’s just… nothing, absolutely nothing, like where we are. And if it seems like it’s fairly similar to where we are: your education has been very blinkered. I say that with compassion, btw. The scale of current inequalit…

What is naive? I don't quite follow you. Since you're so worldly and educated ;) What would you suggest be done about inequality if not taxation of wealth and stronger representation of the "normal people"?

The vast majority of wealth is concentrated in a very small number of people - and not directly attributable to those people - due to local and international tax avoidance.

If I’m so smart what is my simple and obvious solution to this global catastrophe? It’s pretty damn hard to put it all on me to solve in one hacker news comment. Sheesh.

Re: The infamous coin toss

#132

Post by robertlagrant »

LeonB wrote: post #124
robertlagrant wrote: post #108

Earlier quoted context omitted.

How does the plumber exploit people with his/her tool ownership?

They have the opportunity to exploit people through asymmetric knowledge. Any other questions?

Yes: how does the plumber owning tools create that situation?

Re: The infamous coin toss

#133

Post by robertlagrant »

shove wrote: post #115
robertlagrant wrote: post #97

Earlier quoted context omitted.

> The only solution: eat the rich. Don't look at history when people did this, though. Just do it based on this simulation.

Nom nom nom

You eat the rich and you're hungry again in an hour. And now there's no food.

Re: The infamous coin toss

#134

Post by soVeryTired »

Tarsul wrote: post #129

if I go into the casino with 67 bucks and make 1,5 times what I have, I will own 100 bucks. If I go into the casino with 100 bucks and lose a third only (not 40%!) then I will own 67 bucks. Thus, +50% and -40% are not the right arithmetic pairs. It should've been +50% and -33%. It's even more intuitive to say 3/2 and 2/3. Waiting for a matician who can explain better, but this whole story is more of a parlor trick th…

> but this whole story is more of a parlor trick than anything else

I don't think it is really. You're right in saying that 2/3 and 3/2 are the right numbers to ensure that the population wealth stays the same. But the point of the exercise is to show that the population wealth can increase while the wealth of almost any individual in the population decreases.

This is the author's jumping-off point to argue that the standard arguments in economics about average welfare can be far removed from the experience of any single worker in the economy.

Re: The infamous coin toss

#135

Post by DougBTX »

Tarsul wrote: post #129

if I go into the casino with 67 bucks and make 1,5 times what I have, I will own 100 bucks. If I go into the casino with 100 bucks and lose a third only (not 40%!) then I will own 67 bucks. Thus, +50% and -40% are not the right arithmetic pairs. It should've been +50% and -33%. It's even more intuitive to say 3/2 and 2/3. Waiting for a matician who can explain better, but this whole story is more of a parlor trick th…

It looks like those were chosen to get a opposite numbers for the comparison, +5% and -5%:

> the expected value ... grows by 5% in every round ... but, crucially, a head and a tail experienced sequentially is different from two different agents experiencing them ... we have lost ... approximately 5% per round

Re: The infamous coin toss

#137

Post by Swenrekcah »

LeonB wrote: post #131
Swenrekcah wrote: post #111

Earlier quoted context omitted.

What is naive? I don't quite follow you. Since you're so worldly and educated ;) What would you suggest be done about inequality if not taxation of wealth and stronger representation of the "normal people"?

The vast majority of wealth is concentrated in a very small number of people - and not directly attributable to those people - due to local and international tax avoidance. If I’m so smart what is my simple and obvious solution to this global catastrophe? It’s pretty damn hard to put it all on me to solve in one hacker news comment. Sheesh.

>The vast majority of wealth is concentrated in a very small number of people - and not directly attributable to those people - due to local and international tax avoidance.

Yes, this is known. I just asked you to clarify what it was I said that is so naieve?

Re: The infamous coin toss

#138

Post by civilized »

chronolitus wrote: post #101
civilized wrote: post #31

Earlier quoted context omitted.

Almost every person who plays the game will see their money decay towards zero as time goes to infinity.

but, since it is somewhat like a random walk, isn't it guaranteed that if you go on for infinitely many tosses, at some point you will be very rich? [1] https://math.stackexchange.com/a/493446

It's exactly like a random walk... with downward drift. If you take the log of the wealth, the steps are: log(1.5) = 0.18, log(0.6) = -0.22. So at each step, there's a 50% chance you go up 0.18, and a 50% chance you go down 0.22.

Random walks with downward drift don't inevitably go up arbitrarily high like ones without drift.

Re: The infamous coin toss

#139

Post by shove »

robertlagrant wrote: post #133
shove wrote: post #115

Earlier quoted context omitted.

Nom nom nom

You eat the rich and you're hungry again in an hour. And now there's no food.

Yes we rich-eaters have been surviving on a mono-culture of rich folk and will surely starve without the rich who sacrifice themselves selflessly for our sustenance.

Re: The infamous coin toss

#140

Post by LeonB »

Swenrekcah wrote: post #137
LeonB wrote: post #131

Earlier quoted context omitted.

The vast majority of wealth is concentrated in a very small number of people - and not directly attributable to those people - due to local and international tax avoidance. If I’m so smart what is my simple and obvious solution to this global catastrophe? It’s pretty damn hard to put it all on me to solve in one hacker news comment. Sheesh.

>The vast majority of wealth is concentrated in a very small number of people - and not directly attributable to those people - due to local and international tax avoidance. Yes, this is known. I just asked you to clarify what it was I said that is so naieve?

You asked two questions. Sorry if I answered the wrong one.

I think when the person above suggested eating the rich you literally believed them and you’ve been on a misguided tear ever since. There’s little I can do to help you, but by god I’m glad I tried. Best wishes.

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