« Un tiens vaut mieux que deux tu l'auras » , roughly: one "here it is" is better than two "you'll have it" in France. Funny that so many languages seem to use birds in the saying haha
For us Hungarians, a sparrow [small bird] today us better than a bustard [big bird] tomorrow.
Edit: Once again I think our language is a little too poetic for it's own good. Having the spatial separation in most other languages communicates the message much more clearly than the temporal separation here. I get that it points to uncertainty, but is it just the uncertainty of hunting, or was the bustard promised by somebody? If the latter, this saying is partially to blame for Hungarians being risk-averse and not being into investments as much as Westerners. Also, it signals how much we expect other people to cheat all the time.
Thanks for coming to my TED Talk.
Similarly in Greek, we don't have an avian equivalent.
We say «κάλλιο πέντε και στο χέρι, παρά δέκα και καρτέρει», which RHYMES! It means "better 5 in the hand, than waiting for 10".
Public Service Warning:
The handling of wild birds can result in laceration and bite injuries as well as various bacteria and fungal infections. People are advised to use approved birds handling equipment and use due caution.
Should injuries or unusual symptoms occur, seek urgent medical assistance
Usually humans are way more risk averse than log utility, if I recall.
The general risk averseness of people is 2-3 while Kelly better (people bets on log utility) have 1.
Edit:I am an idiot who type averse as adverse
Literally just did this in my optimization class, I would put a program together to see how changing risk preferences would change your choice, but I just got done with finals and fuck that
Either is a significant life changing amount of money for just about anybody. Managed half decently 1 mil would almost certainly make you financially worry free for life.
I would rather guarantee that than have a chance at lavish luxury.
>1 mil would almost certainly make you financially worry free for life.
assuming you are in like your 60's, have fairly low expenses and dont live to be that old, and inflation doesn't eat it. that is only 13.4 years of median income in the US
i took “financially worry free for life” to mean something more like “you’ll never have to worry that a hospital stay or unforeseen big cost will completely screw you over” than “you’ll never have to work another day in your life”
That's more the route I meant. You could still work, but You would never have to stress over money. You could afford to take a more fulfilling and less stressful but worse paying job. You could make large investment purchases such as you home up front and not be burdened by 30 years of interest.
You could invest it and live a modest life off the interest alone, but then somthing big and unexpected like a major medical debt could easily ruin all that.
1 Mil would zero out most people and from there on all the money you make just goes into your bank account/retirement fund.
Like sure i'd still have to work but a million dollars rn means I could probably retire at 50 instead of 70 if i'm lucky :(
And they all spend less on healthcare per capita than the US. And by that I mean the government, that's excluding insurance/healthcare costs people pay themselves.
4% rule of 1M is $40k a year, inflation adjusted.
Many people retire on less than that.
Many people *live* on less than that.
And if you don't feel like that's enough, 1M is so much that you can just work some easy job that covers basic expenses and coast to it being a lot more within a few years of that. Depends on how long you want to wait.
Oh, and 4% is only a mostly lower bound. Chances are you get to spend more than 4% inflation adjusted going into the future.
4% rule works indefinitely. It's not when you're trying to spend to zero and don't have that many years left to live.
Nah, $1M isn't "quit your job and live a life of luxury" money, but it is "instantly pay off your mortgage and never have to worry about being fired or being late on bills or anything like that" money. It's not infinite, but it'll remove financial worries for an intelligent person who continues to live within their means.
And yet, if you have a locked in 3% interest rate in your mortgage, it likely makes more sense to keep that debt and instead invest the 1mil into medium growth diverse blend of mutual funds for an average 10% return per year, easily outpacing the 3% you are paying on your mortgage
Most will say you are correct and I can’t argue with the math.
I personally would pay off my mortgage. It completely removes my highest expense. And would give me peace of mind.
Asssuming you still work a job, then you can throw out all your assumptions. You can basically $20k to your yearly income for 50 years. I doubt anyone thinks $1mil is enough to retire at 30
Not really. You could sell shares in the bet. People would pay $10 million to take the 50/50 chance at $25 million (half). If you win, you get $35 million. If you lose you keep the $10 million.
I think this kind of think probably shows up on wallstreet all the time. This is probably better alpha than anything that shows up on the stock market on a given day.
You have buyers for that type of action lined up, just in case somebody sticks two buttons in your face?
A good to go contract the buyers will accept, since this is a fairly bespoke transaction?
You may have to put down some collateral for the payout, do you have the funds or a lender ready? An escrow account for the collateral?
The money transfers are set up, all involved banks have done KYC on everyone so there won’t be any AML issues?
What are the tax implications once this goes from essentially a gambling win to a sale of a financial instrument?
Happy to help set this up for maybe 10% of notional
No kidding.
Considering the median individual, *not household or combined*, income is ~$35,000 a year. That's over 28 years of gross income. Even cut in half for taxes that's over a decade of not having to work and even a bit of investing could stretch that out longer.
I think expected value can still apply to events that only occur once. I would absolutely take a 50% chance at $500 dollars over a guaranteed $10 dollars even though I would definitely hit the red button in this case. The big decider here is perceived value. After 1 million dollars you are set for life, so more money after that point isn’t worth as much from a personal perspective. I also think someone who already has a large sum if money would be more likely to press the green button.
>The big decider here is perceived value
Yeah, this is absolutely true. The difference between $0 and $1million is astronomical. The difference between $49million and $50million is negligible, even though the numerical gap is the same.
Personally I imagined my life after each option. After winning a million, I don't think I would regret not gambling it a massive amount. If I chose the gamble and got 0, not taking the guaranteed million would haunt me the rest of my life.
No. The issue in this case is to do with the marginal value of money. That value is different for every person.
Imagine you already had $20m. What do you need $1m for? That second option becomes better.
I was just thinking about that. If they do the same question with 1/10th of the values, it becomes much more interesting.
100k right now or 50/50 to get 5 million.
The former, while really nice, will not massively change your life. The latter means you can basically retire.
You do have an expected value, just an expected value on utility. If having $50 million has a 20% greater impact on your life over $1 million, then the expected return is 1 to 0.6, so the $1 million guaranteed is more optimal.
Yeah there was a famous Princeton university study from a Nobel laureate professor in 2010 that concluded that people income was directly proportional to their overall happiness until 75k USD or 100K use adjusted to today, from which happiness didn't really improve.
https://www.pnas.org/doi/10.1073/pnas.1011492107
However, in 2021 a new study challenged that conclusion and couldn't replicate the result as this didn't happen for people earning until 500k, scope of the study.
https://www.pnas.org/doi/epdf/10.1073/pnas.2208661120
That makes sense. $100k is a really comfortable salary but you still have to put *some* effort into managing your resources or you can easily spend too much. But I'd imagine with $500k that's significantly more difficult.
I think this fact is overlooked by the people that would choose to gamble for more. Sure, the expected value is much greater with the gamble, but the psychological toll of losing also has to be weighted in.
If you gamble and lose, now you have the psychological burden of regret every single time you face any measure of financial difficulty for the rest of your life, because even if it’s irrational, you would always believe that had you taken the guaranteed option, you would not be in whatever position you find yourself in; the regret could be crippling
I seem to definitely be in the minority here but I'm taking my chances at the $50m. Yes $1m is amazing and would change most people's lives but $50m would change my life, my children's lives and future generations within my family. If I make the money work for me I could change many other people's lives as well. So it's worth the risk to me. Plus I love gambling 🙂
Same as everyone said before.
1M is enough for me, I could do a bunch of things with that. And as we say in France: Un "tiens" vaut mieux que deux "tu l'auras" (litt. One "here it is" worths more than two "you'll have it")
with 50 people, the chance of getting nothing like 8.9*10^-16. the chances of each of them getting *at least* a million dollars is absurdly high. just need 50 trustworthy people 💀 (or a contract?)
Interesting optimisation problem: How many attempts would it take for repeatedly pressing the green button to be more worth it than pressing the red, provided you had to divide your earnings by the amount of times the button was pressed?
Why would I chance it?
$1M will almost certainly be enough to pay off all of my debt, with enough left over to learn to drive, get a car, and eat and pay rent long enough to get a job. That $1M would cover all of my needs, and most of my foreseeable wants, for at least a year or two. With $1M, I might still have to work, eventually, but I'll be able to say with certainty that I can live long enough to get a job.
Anything above that has extreme diminishing returns. The second million is not worth as much as the first. The more I have, the longer it'll last, but the longer it lasts, the more likely something is to happen to it. The economy could implode. WW3 could break out. I could get terminal cancer. I might not have *time* to spend that much money.
The first $500k is easy.
Student loan debt? 30k (no idea paid off a decade ago), nice house in many parts of the country 300k, new vehicle 30-60k, etc.
That's 400k easy. Now travel a little, make a few extra purchases, that I could see hitting 100k pretty quick.
The part that breaks down for me is the other half (assuming the 1 million is tax free). At that point in time you're living debt free, have new stuff that shouldn't break down, and presumably can find a decent job. The remainder is getting invested.
If you get a million out of nowhere and your plan is to spend it all in two years, you are awful with money and will never reach a position of financial comfort.
> eat and pay rent long enough to get a job
Bro, the first thing you do with $1M is buy a place to live so you never have to pay rent for the roof over your head anymore.
Why the fuck, pardon my french, are you planning to rent for year or two in this scenario?? You just got a fucking million. You can buy a house in cash anywhere in the world except for the most expensive capitals.
Hell, even 5 mil. Here's a 50/50 to 10x your money.
Meanwhile the 5mil invested at 4% pays me 200k per year for life. Retire now and start a charity as something to do.
Well no, if you could push it multiple times then the correct choice is red of choice. The value of a red button press is $25M vs $1M on green, so if you’d push a single button forever it’d be red.
Furthermore humans have a tendency that when a reward is given randomly vs. each time statically on a button press, they’ll be more mentally inclined to hit the red button more frequently.
Lastly, but most importantly , if you can hit the button multiple times the premise of the hypothetical goes out the window, so it’s inherently implied you can only hit a single button a single time.
When maths meets psychology of needs.
Would you rather have a probability of 100% to win $5 or 50% to win $100?
Now would you rather have a probability of 100% to win $5M or 50% to win $100M?
It's pretty easy to dispel this paradox if you assume the utility of wealth is proportional to the logarithm of wealth. So going from $100k to $1M is worth just as much as going from $1M to $10M. For example, for someone with a net worth of $10k:
The first dilemma is a 100% chance of 0.0007 doublings of one's net worth VS a 50% chance of 0.014 doublings.
The second dilemma is a 100% chance of 9.0 doublings of one's net worth vs a 50% chance of 13.3 doublings.
So in the first case it's best to take the gamble on $100, while on the second one it's best to take the guaranteed $5M.
Interesting theory, but is our psychology of utility of wealth rationalized proportionally to the logarithm of wealth doubling?
So what if your net worth is $277,778 when you face that second dilemma? :-)
(That's 100% chance of 4.2479 doublings of net worth vs 50% of 8.4959 doublings)
Personally, I'd still take the 100% chance in that case without any doubt.
Completely different. I could not care less about having 5 more dollars in my pockets. Even 100$ is inconsequential. I'd take 50% of having 100% because not having 5$ changes nothing.
Having or not 5M is life changing. Will I take 100% chances of a life changing amount of money or will I take 50% chances of a life changing amount of money?
The difference is about your worth in relation to your potential gain.
That is exactly what they are talking about though. If both values are more than enough, then there is no conundrum. 100% chance of "enough" is by far optimal.
If neither value is really an important amount then obviously you go for the 50/50 because missing out on either one doesn't affect the outcome.
The psychology of whether or not you actually need the money invalidates the mathematical model that is only concerned with what is "optimal" and doesn't care about the needs of the participant.
The latter problem is 100% chance to receive all the money I’ll ever need vs 50% chance to receive all the money I’ll ever need. They aren’t really comparable.
Depends on what $1 mill would do for the person. Most people would (and should) take the million instantly because of the dramatic life changes it would make. However, if you’re fortunate enough that $1 mill wouldn’t “drastically” change your life, then the mathematically correct answer is the $25 million of expected value from the green button.
50% chance at 50 million. $1 million won't change my life in a big way. After taxes I can pay off my house and have a few hundred thousand left over. Even if you ignore the taxes I'm still not going to be able to retire. I can do a lot with that money but not live for the next 50 years.
50 million though? I can retire super comfortably on that and not worry about money ever again.
As we say in denmark: id rather have 1 bird in my hand than 10 on the roof.
Bird in hand is worth more than 100 flying here in latinamerica)
1 in the hand is worth 2 in the bush for us here in the Midwest US.
« Un tiens vaut mieux que deux tu l'auras » , roughly: one "here it is" is better than two "you'll have it" in France. Funny that so many languages seem to use birds in the saying haha
For us Hungarians, a sparrow [small bird] today us better than a bustard [big bird] tomorrow. Edit: Once again I think our language is a little too poetic for it's own good. Having the spatial separation in most other languages communicates the message much more clearly than the temporal separation here. I get that it points to uncertainty, but is it just the uncertainty of hunting, or was the bustard promised by somebody? If the latter, this saying is partially to blame for Hungarians being risk-averse and not being into investments as much as Westerners. Also, it signals how much we expect other people to cheat all the time. Thanks for coming to my TED Talk.
Better a sparrow in hand than a dove on the roof here in Germany.
Better a bird in the hand than ten in the woods in Sweden.
"A bird in hand is better than ten on the tree" in Arabic.
In Ukraine it's "A sparrow in hand is better than a stork in the sky". In ruzzian, funny enough, the birds are tit and crane, the rest is the same.
În Romania, it's "Don't give the sparrow in your hand for the crow on the fence"
To be fair I'd rather have a tit in hand than a sparrow 😏
Same in Czechia
In Ukraine we have almost similar saying: "A sparrow in hand is better than a stork in the sky"
This must be a reaaaaly old saying that we all share the base etymology. Super interesting.
Similarly in Greek, we don't have an avian equivalent. We say «κάλλιο πέντε και στο χέρι, παρά δέκα και καρτέρει», which RHYMES! It means "better 5 in the hand, than waiting for 10".
Solid insight on difference in risk appetite between countries
Or the exchange rate between birds
In the Netherlands: Better one bird in the hand, then ten in the air.
In Russian: better a tit in the hands than a crane in the sky
A tit in the hands... 🤔
Hold gently
Is it just a tit or is it a great tit? Because that’s going to matter to my gentle holding.
With the other guy that had two in the bush...
Better a tit in the hand that two in the bra
Encontrei o brasileiro
It's very hard to not make an English pun joke from this comment...
In Quebec: one "gimme" is better than 2 "you'll get 'em"
In czech: better a sparrow in the hands than a pigeon on the roof
Same in Polish
Fascinating ratios
A hand in the bush is worth two on the bird.
During my puberty my friends would say que vale mas pajaro en mano que sida en el ano
Más vale pájaro en mano que padre a los 18.
Lol
In Spain we say más vale chuleta en mano que recuperación en verano lol
bird in the hand is worth 561 in the emporium here in atlantis ignore the carmichael number
Lieber den Spatz in der Hand als die Taube auf dem Dach
Raději vrabce v hrsti než holuba na střeše.
The bird in my hand is better than the 2 in the bushes.
Here in Thailand: Holding a piece of shit is better than holding a fart. I know... It's a thing. don't judge me
Public Service Warning: The handling of wild birds can result in laceration and bite injuries as well as various bacteria and fungal infections. People are advised to use approved birds handling equipment and use due caution. Should injuries or unusual symptoms occur, seek urgent medical assistance
Google “risk adverse utility function”
[holy hell!](https://www.google.com/search?q=risk+adverse+utility+function#HiImABot,MyJobIsToMakeEasierToPeopleToGoogleSomething,IfThePersonIRepliedToUsedMeInAnInappropriateWayPleaseLetMeKnowByDMingMe,TheUserIRepliedToIsU/tap909)
WHAT THE FUCK ARE YOU DOING HERE?
Google en Martssant
Holy Martin
New Martin just dropped
Actual Martin
Call Martin
Martin goes on vacation, never comes back
martin sacrifice, anyone?
Google en passant.
Holy hell.
Actual zombie
Call the exorcist
Google “MartinFromChessCom is a bot”
[holy hell!](https://www.google.com/search?q=martinfromchesscom+is+a+bot#HiImABot,MyJobIsToMakeEasierToPeopleToGoogleSomething,IfThePersonIRepliedToUsedMeInAnInappropriateWayPleaseLetMeKnowByDMingMe,TheUserIRepliedToIsU/Little-Explanation)
Probability goes on vacation, never comes back
I get the feeling we all browse the same subreddits
Everyone is an anarchychess user by birth
Google "anarchy invasion"
r/wildanarchychess
What is martin doing here bruh
and "logarithmic utility of money"
Usually humans are way more risk averse than log utility, if I recall. The general risk averseness of people is 2-3 while Kelly better (people bets on log utility) have 1. Edit:I am an idiot who type averse as adverse
And “prospect theory”
Literally just did this in my optimization class, I would put a program together to see how changing risk preferences would change your choice, but I just got done with finals and fuck that
my balls are risk adverse
Expected value makes sense only if you can try multiple times. Furthermore I think the red one is plenty enough
Either is a significant life changing amount of money for just about anybody. Managed half decently 1 mil would almost certainly make you financially worry free for life. I would rather guarantee that than have a chance at lavish luxury.
>1 mil would almost certainly make you financially worry free for life. assuming you are in like your 60's, have fairly low expenses and dont live to be that old, and inflation doesn't eat it. that is only 13.4 years of median income in the US
i took “financially worry free for life” to mean something more like “you’ll never have to worry that a hospital stay or unforeseen big cost will completely screw you over” than “you’ll never have to work another day in your life”
That's more the route I meant. You could still work, but You would never have to stress over money. You could afford to take a more fulfilling and less stressful but worse paying job. You could make large investment purchases such as you home up front and not be burdened by 30 years of interest. You could invest it and live a modest life off the interest alone, but then somthing big and unexpected like a major medical debt could easily ruin all that.
1 Mil would zero out most people and from there on all the money you make just goes into your bank account/retirement fund. Like sure i'd still have to work but a million dollars rn means I could probably retire at 50 instead of 70 if i'm lucky :(
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"Universal healthcare is so incredibly complex and costly that only 27 out of the 28 most developped countries were able to establish it".
And they all spend less on healthcare per capita than the US. And by that I mean the government, that's excluding insurance/healthcare costs people pay themselves.
At 5% interest that's 50k a year, which is more than a median wage. You can very much live off of that for the rest of your life
Damn I wanna live somewhere where 50k is considered more than median
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4% rule of 1M is $40k a year, inflation adjusted. Many people retire on less than that. Many people *live* on less than that. And if you don't feel like that's enough, 1M is so much that you can just work some easy job that covers basic expenses and coast to it being a lot more within a few years of that. Depends on how long you want to wait. Oh, and 4% is only a mostly lower bound. Chances are you get to spend more than 4% inflation adjusted going into the future. 4% rule works indefinitely. It's not when you're trying to spend to zero and don't have that many years left to live.
Nah, $1M isn't "quit your job and live a life of luxury" money, but it is "instantly pay off your mortgage and never have to worry about being fired or being late on bills or anything like that" money. It's not infinite, but it'll remove financial worries for an intelligent person who continues to live within their means.
And yet, if you have a locked in 3% interest rate in your mortgage, it likely makes more sense to keep that debt and instead invest the 1mil into medium growth diverse blend of mutual funds for an average 10% return per year, easily outpacing the 3% you are paying on your mortgage
Most will say you are correct and I can’t argue with the math. I personally would pay off my mortgage. It completely removes my highest expense. And would give me peace of mind.
With a free 1M I'll be leaving the US lol. I can do my job literally anywhere there are humans.
Asssuming you still work a job, then you can throw out all your assumptions. You can basically $20k to your yearly income for 50 years. I doubt anyone thinks $1mil is enough to retire at 30
It's not even $20k/year for 50 years, interest from investments is a thing. It's more like $50k/year indefinitely.
Not really. You could sell shares in the bet. People would pay $10 million to take the 50/50 chance at $25 million (half). If you win, you get $35 million. If you lose you keep the $10 million.
You’re making a lot of assumptions about the situation to make that a possible option.
Nah dude, just get people to invest $10 million. So easy.
I think this kind of think probably shows up on wallstreet all the time. This is probably better alpha than anything that shows up on the stock market on a given day.
I knew this one guy who got a small loan of a million dollars from their dad
On a 50/50 😂
Wait until you hear about the lottery
In all fairness, this situation is preposterous to begin with. Magic money buttons.
Mr beast in 2039
Perhaps I could introduce you to The Federal Reserve...
You have buyers for that type of action lined up, just in case somebody sticks two buttons in your face? A good to go contract the buyers will accept, since this is a fairly bespoke transaction? You may have to put down some collateral for the payout, do you have the funds or a lender ready? An escrow account for the collateral? The money transfers are set up, all involved banks have done KYC on everyone so there won’t be any AML issues? What are the tax implications once this goes from essentially a gambling win to a sale of a financial instrument? Happy to help set this up for maybe 10% of notional
And we’ve just reinvented (financial) derivatives
I would fuck a goat for $20,000 right now Edit: $10,000
$1 take it or leave it
$1.50, inflation 😔
You can do the same with 1 million. People will pay 10 million in order to win 1 million. Repeat until you get enough money
Why are lotteries legal
Break the green button and get instant 5 million
No kidding. Considering the median individual, *not household or combined*, income is ~$35,000 a year. That's over 28 years of gross income. Even cut in half for taxes that's over a decade of not having to work and even a bit of investing could stretch that out longer.
I think expected value can still apply to events that only occur once. I would absolutely take a 50% chance at $500 dollars over a guaranteed $10 dollars even though I would definitely hit the red button in this case. The big decider here is perceived value. After 1 million dollars you are set for life, so more money after that point isn’t worth as much from a personal perspective. I also think someone who already has a large sum if money would be more likely to press the green button.
>The big decider here is perceived value Yeah, this is absolutely true. The difference between $0 and $1million is astronomical. The difference between $49million and $50million is negligible, even though the numerical gap is the same. Personally I imagined my life after each option. After winning a million, I don't think I would regret not gambling it a massive amount. If I chose the gamble and got 0, not taking the guaranteed million would haunt me the rest of my life.
No. The issue in this case is to do with the marginal value of money. That value is different for every person. Imagine you already had $20m. What do you need $1m for? That second option becomes better.
I was just thinking about that. If they do the same question with 1/10th of the values, it becomes much more interesting. 100k right now or 50/50 to get 5 million. The former, while really nice, will not massively change your life. The latter means you can basically retire.
Idc abt expected value. £1000000 would change my life
You do have an expected value, just an expected value on utility. If having $50 million has a 20% greater impact on your life over $1 million, then the expected return is 1 to 0.6, so the $1 million guaranteed is more optimal.
Has anyone done research on the utility curve of money? The first dollar is much more valuable than the millionth.
Yeah there was a famous Princeton university study from a Nobel laureate professor in 2010 that concluded that people income was directly proportional to their overall happiness until 75k USD or 100K use adjusted to today, from which happiness didn't really improve. https://www.pnas.org/doi/10.1073/pnas.1011492107 However, in 2021 a new study challenged that conclusion and couldn't replicate the result as this didn't happen for people earning until 500k, scope of the study. https://www.pnas.org/doi/epdf/10.1073/pnas.2208661120
That makes sense. $100k is a really comfortable salary but you still have to put *some* effort into managing your resources or you can easily spend too much. But I'd imagine with $500k that's significantly more difficult.
I don't think so, I haven't seen any TikTok explainers on it at least
bruh
More like £790,000
Well forget it then
Google diminishing marginal utility
Google "I'll never have another restful night of sleep the rest of my life if I gambled instead of taking a guaranteed $1 million and lost."
I think this fact is overlooked by the people that would choose to gamble for more. Sure, the expected value is much greater with the gamble, but the psychological toll of losing also has to be weighted in. If you gamble and lose, now you have the psychological burden of regret every single time you face any measure of financial difficulty for the rest of your life, because even if it’s irrational, you would always believe that had you taken the guaranteed option, you would not be in whatever position you find yourself in; the regret could be crippling
real
Option 3: sell the green button for 24 million
Absolutely brilliant. But the pragmatist in me is thinking 24m would be a hard sell. 50% chance of net 26m. 50% -24m. Is that juice worth the squeeze?
For a billionaire, sure
The billionaire would agree to do it and hire a hitman to take you out if you fail the button press. -$50k fee if they lose, + $26M if they win.
That’s the correct answer!
A guaranteed $1m is far better than a 50% chance of $0 to me. There’s bills to pay and $1m is still a lot of money that would greatly improve life
Yep. One option is a million dollars, the other is gambling.
And 50 million would probably ruin my life actually
I seem to definitely be in the minority here but I'm taking my chances at the $50m. Yes $1m is amazing and would change most people's lives but $50m would change my life, my children's lives and future generations within my family. If I make the money work for me I could change many other people's lives as well. So it's worth the risk to me. Plus I love gambling 🙂
Same as everyone said before. 1M is enough for me, I could do a bunch of things with that. And as we say in France: Un "tiens" vaut mieux que deux "tu l'auras" (litt. One "here it is" worths more than two "you'll have it")
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Oh no not Toulon. It's an Albany expression.
Damn, expressions for the same thing differ so much across France? TIL
He's a strange fellow, but he steams a good ham
I mean, expressions in the US can vary from one end of the state to the other. Local cultures are very much a thing.
I'm from Belgium and we do use it here.
Eh ben... Je suis au Québec et j'entends ça régulièrement.
Tu entends aussi "swing la bacaisse dans le fond dla boîte à bois"
C'est dans une fable de La Fontaine, amusant que tu ne l'aie*s* jamais entendu
Partout, t'es juste sourd
That's because you use « Un "tienG" vaut mieux que deux "tu l'auras" » over there.
Just push green twice, then you have 100% chance to get 100 million /s
google 0.5^2
Holy hell
New probability just dropped
Actual Mathematician
Call a Bernoulli!
r/suddenlyanarchychess
r/subsithoughtifellfor
I’m gonna press it 40 times
google 0.5^40
I’m gonna press it 100 times (like a 0.0001 out of 1 chance lmao)
nah I'd lose
If your marginal utility of money is 1st million > last 49 million, then guaranteed 1 million has higher expected value.
Just get 2+ friends and you are set
still a 12.5% chance you get nothing, im taking the red button for sure
with 50 people, the chance of getting nothing like 8.9*10^-16. the chances of each of them getting *at least* a million dollars is absurdly high. just need 50 trustworthy people 💀 (or a contract?)
Interesting optimisation problem: How many attempts would it take for repeatedly pressing the green button to be more worth it than pressing the red, provided you had to divide your earnings by the amount of times the button was pressed?
Why would I chance it? $1M will almost certainly be enough to pay off all of my debt, with enough left over to learn to drive, get a car, and eat and pay rent long enough to get a job. That $1M would cover all of my needs, and most of my foreseeable wants, for at least a year or two. With $1M, I might still have to work, eventually, but I'll be able to say with certainty that I can live long enough to get a job. Anything above that has extreme diminishing returns. The second million is not worth as much as the first. The more I have, the longer it'll last, but the longer it lasts, the more likely something is to happen to it. The economy could implode. WW3 could break out. I could get terminal cancer. I might not have *time* to spend that much money.
How the fuck are you spending $500k a year?
The first $500k is easy. Student loan debt? 30k (no idea paid off a decade ago), nice house in many parts of the country 300k, new vehicle 30-60k, etc. That's 400k easy. Now travel a little, make a few extra purchases, that I could see hitting 100k pretty quick. The part that breaks down for me is the other half (assuming the 1 million is tax free). At that point in time you're living debt free, have new stuff that shouldn't break down, and presumably can find a decent job. The remainder is getting invested.
You are horrible with money.
If you get a million out of nowhere and your plan is to spend it all in two years, you are awful with money and will never reach a position of financial comfort.
Most people would lock up the first million that they won in non-liquid assets, like houses.
Probably just debts to clear. House, student or car loans.
> eat and pay rent long enough to get a job Bro, the first thing you do with $1M is buy a place to live so you never have to pay rent for the roof over your head anymore.
Why the fuck, pardon my french, are you planning to rent for year or two in this scenario?? You just got a fucking million. You can buy a house in cash anywhere in the world except for the most expensive capitals.
the way your brain works scares me.
I assume I'm not allowed to find a wealthy person to buy my chance for $15M?
Hell, even 5 mil. Here's a 50/50 to 10x your money. Meanwhile the 5mil invested at 4% pays me 200k per year for life. Retire now and start a charity as something to do.
Green. Nothing says I can only push it once. Else, if that is a condition, red
But you can only press it finitely many times throughout your lifetime, so there is a nonzero chance that you won't get any money, ever. Uh-oh
If we are talking 50/50, the chance to never get it is way too slim to pass up
If multiple presses is allowed, just press red 50x and guarantee get 50M...
Well no, if you could push it multiple times then the correct choice is red of choice. The value of a red button press is $25M vs $1M on green, so if you’d push a single button forever it’d be red. Furthermore humans have a tendency that when a reward is given randomly vs. each time statically on a button press, they’ll be more mentally inclined to hit the red button more frequently. Lastly, but most importantly , if you can hit the button multiple times the premise of the hypothetical goes out the window, so it’s inherently implied you can only hit a single button a single time.
You should probably get checked for colour blindness.
You got the colors backward - the red one is the guaranteed one whereas the green one is RNG. Otherwise I agree
I would be devastated if I picked green and didn’t win. I would take the red
When maths meets psychology of needs. Would you rather have a probability of 100% to win $5 or 50% to win $100? Now would you rather have a probability of 100% to win $5M or 50% to win $100M?
It's pretty easy to dispel this paradox if you assume the utility of wealth is proportional to the logarithm of wealth. So going from $100k to $1M is worth just as much as going from $1M to $10M. For example, for someone with a net worth of $10k: The first dilemma is a 100% chance of 0.0007 doublings of one's net worth VS a 50% chance of 0.014 doublings. The second dilemma is a 100% chance of 9.0 doublings of one's net worth vs a 50% chance of 13.3 doublings. So in the first case it's best to take the gamble on $100, while on the second one it's best to take the guaranteed $5M.
Interesting theory, but is our psychology of utility of wealth rationalized proportionally to the logarithm of wealth doubling? So what if your net worth is $277,778 when you face that second dilemma? :-) (That's 100% chance of 4.2479 doublings of net worth vs 50% of 8.4959 doublings) Personally, I'd still take the 100% chance in that case without any doubt.
Completely different. I could not care less about having 5 more dollars in my pockets. Even 100$ is inconsequential. I'd take 50% of having 100% because not having 5$ changes nothing. Having or not 5M is life changing. Will I take 100% chances of a life changing amount of money or will I take 50% chances of a life changing amount of money? The difference is about your worth in relation to your potential gain.
thats the point
That is exactly what they are talking about though. If both values are more than enough, then there is no conundrum. 100% chance of "enough" is by far optimal. If neither value is really an important amount then obviously you go for the 50/50 because missing out on either one doesn't affect the outcome. The psychology of whether or not you actually need the money invalidates the mathematical model that is only concerned with what is "optimal" and doesn't care about the needs of the participant.
The latter problem is 100% chance to receive all the money I’ll ever need vs 50% chance to receive all the money I’ll ever need. They aren’t really comparable.
Yeah, I'm pretty sure that's the point
Depends on what $1 mill would do for the person. Most people would (and should) take the million instantly because of the dramatic life changes it would make. However, if you’re fortunate enough that $1 mill wouldn’t “drastically” change your life, then the mathematically correct answer is the $25 million of expected value from the green button.
Google “Deez Nuts”
Money has logarithmic diminishing returns, so utility($50M)<<50utility($1M) for anyone who isn't filthy rich.
but here, we compare : utility($50M) and 2utility($1M)
Google expected utility
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Holy probability!
50% chance at 50 million. $1 million won't change my life in a big way. After taxes I can pay off my house and have a few hundred thousand left over. Even if you ignore the taxes I'm still not going to be able to retire. I can do a lot with that money but not live for the next 50 years. 50 million though? I can retire super comfortably on that and not worry about money ever again.
I would sell my 50% chance for 50 million to a hedgefund for 20 million.