Yeah, it's obviously logarithmic or something. There is diminishing value in money. I think the way you put it makes it very intuitive though.

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?

That one is actually very hard and not a simple no brainer. 50k is good but not live changing much. 10M would completely change the live, even allow one to never work again and still have a decent living standard.

Any multi-millionaire on lemmy (what?) wanna buy my 50% chance?

If 50M is success I will give you 90% of it, but if it's failure then you will give me 50K

a study where people were offering $50k vs a 50% chance at $10m

That's very different than $10T v $20T.

But I'd also like to know who is running around giving away all this money to begin with.

The premise is fanciful no matter how you slice it.

Wait, what? That seems so trivial. As a sanity check (and assuming I'm reading this right): unless you're utterly destitute or you're ground floor on some insane, foolproof investment opportunity but have no spare capital, you literally always go for the expected $5 million, right?

10T*

1T turns into 20T pretty quickly if you know what you're doing honestly.

• Half the money you need for a life saving operation, and a shiny button

Even if only one person wins the coin toss that's 100B per person, which is 99B more than you could ever reasonably spend in a lifetime.

This is referenced in the alt text, I looked it up:

https://finance.yahoo.com/news/sbf-dangerous-decision-making-philosophy-124600175.html

Yet when asked exactly that in a March 2022 podcast with Tyler Cowen, Sam Bankman-Fried (SBF) was quite willing to play that game–and keep playing it, over and over again. Cowen asked SBF about the high likelihood of destroying everything by going double of nothing on a series of coin flips. SBF responded that he was willing to make this trade-off for the possibility of coin-flipping his way into "an enormously valuable existence."

Fortunate that he went bust on only a few billion worth of stolen money and not the fate of humanity, though the same can't be said for the rest of the delusionally arrogant megalomaniacs running things

I actually like it when games do that sort of thing, keeps you on your toes, shoutout to Backpack Battles

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

It's a genie so it just enters circulation into your bank account and hopefully doesn't start a cascade of hyperinflation 👍