Risk Everything (2007)

Post by MauranKilom » Thu, Aug 25, 2022, 10:34 AM UTC

GuB-42 wrote: post #81

kqr wrote: post #15

Earlier quoted context omitted.

Your statement sort of assumes the worst case has negative infinity utility. Which, granted, is usually how economists model human behaviour, but perhaps not how humans behave in practise. (If death truly had negative infinity utility, it would overpower the benefit of everything and we couldn't do anything.)

I think it is more about the "risk of ruin" than infinities. Here is the idea: you go in a casino with $1000, that's your self-imposed limit, you will not die if you lose it, but it means you will stop playing, and you will have no way to recover from your losses, time to go home. That's what ruin is. And this is something you have to take into account. For example, imagine you find a game where you have 50% chance o…

Obligatory: https://en.wikipedia.org/wiki/Kelly_criterion

Post by [deleted] » Thu, Aug 25, 2022, 10:41 AM UTC

kqr wrote: post #34

oarabbus_ wrote: post #28

Earlier quoted context omitted.

>(If death truly had negative infinity utility, it would overpower the benefit of everything and we couldn't do anything.) It's true death has utility in an economic sense, as one needs not look further than the funeral/death care industry to find utility. But if we are talking about death of the self, the negative infinite utility claim seems more convincing than the non-negative-infinite one. In fact, negative infi…

I am talking about death of the self. When crossing the street, there's a tiny risk of death, but a fairly good chance of a somewhat desirable outcome (getting to the other side.) If you considered your death to have negative infinity utility, and the desirable outcome to have finite positive utility, then you would opt to not cross the street ever, because negative infinity times small probability plus positive fini…

[deleted]

Re: Risk Everything (2007)

Re: Risk Everything (2007)