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Question: If I would give you these options, what would you choose?
100 BTC - no strings attached
25% chance of getting 1000 BTC

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Author Topic: How greedy are you?  (Read 1028 times)
Carlos L.
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February 05, 2013, 11:01:37 AM
 #1

How greedy are you?

Option 1: You receive 100 BTC to do whatever you want.
Option 2: You get 25% probability to receive 1000 BTC to do whatever you want.

EDIT: Changed first option from 10 to 100 BTC.

EDIT 2: This is a one time opportunity, you wouldn't be able to go back and change your decision.
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cedivad
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February 05, 2013, 11:04:58 AM
 #2

Avg. winnings with the second chance are better, so why should i choose the first one?

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February 05, 2013, 11:29:01 AM
 #3

2nd option is the better one.

It seemed like a good idea at the time.
StarenseN
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February 05, 2013, 11:31:43 AM
 #4

EV+ second option, why bother?
Akka
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February 05, 2013, 11:58:10 AM
 #5

Option one: expected profit = 100 BTC

Option two: expected profit = 250 BTC

Of course I take the gamble.

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February 05, 2013, 12:01:28 PM
 #6

BTC100 please Smiley

I go through like with guarantees.  I feel like a winner ALL DAY Cheesy

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February 05, 2013, 12:23:06 PM
 #7

Option one: expected profit = 100 BTC

Option two: expected profit = 250 BTC

Of course I take the gamble.

Option one: 100 BTC guaranteed
Option two: 1000 BTC or nothing

You can only choose one time, no splinting between people.

I know, but in general, if in my live I always choose the options that will mathematically have the higher reward, I will sooner or later profit from it, simply due to normal distribution.

The expected profit from option 2 is 250 BTC (1000 * 0.25)

If I play Satoshi Dice with 1 BTC. my expected profit is - 0.03 BTC (no matter which game).

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Akka
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February 05, 2013, 12:31:30 PM
 #8

snip

I know, but in general, if in my live I always choose the options that will mathematically have the higher reward, I will sooner or later profit from it, simply due to normal distribution.
Never thought about it like that. Interesting.

But still, nothing guarantees you'll have another situation in your life where you can gamble away your options.

Of course there is an end to this:

If I had the option, to

100% cahance get enough to set me for life

or

95% chance to get double that.

I would go with the 100%, but that's an extreme example  Cheesy

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StarenseN
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February 05, 2013, 12:31:39 PM
 #9


Never thought about it like that. Interesting.


Fundamental for gamblers, especialy poker players but also in real life.
TTBit
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February 05, 2013, 01:33:34 PM
 #10


Take the 25% chance and sell it for much more than 100 BTC

good judgment comes from experience, and experience comes from bad judgment
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February 05, 2013, 01:37:29 PM
 #11

Would you rather have:

* $50 million US guaranteed
* 10% chance at $4 Billion US

2nd option is worth 8x the first, so you take that one?

good judgment comes from experience, and experience comes from bad judgment
MysteryMiner
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February 05, 2013, 01:44:13 PM
 #12

2-nd option = 75% chance to get nothing.

On average and in long run 2-nd option is better, but I choose guaranteed 100BTC.

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K1773R
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February 05, 2013, 02:30:49 PM
 #13

2-nd option = 75% chance to get nothing.

On average and in long run 2-nd option is better, but I choose guaranteed 100BTC.
true, but you can only play once.

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February 05, 2013, 02:49:28 PM
 #14

I will bet on 2 nd option all day long

If it's a one time play, I still keep betting on the same choice.

It's not about gambling or be greedy, it's about to take the most +EV decision.


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February 05, 2013, 03:53:51 PM
 #15

Option 1 for me. If you pick option 2 you are effectively paying 100BTC for the gamble. And the odds are against you.

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February 05, 2013, 06:01:13 PM
 #16

I will bet on 2 nd option all day long

If it's a one time play, I still keep betting on the same choice.

It's not about gambling or be greedy, it's about to take the most +EV decision.

You have 3 different results;

Option 1:
+100 BTC (100% probability)

Option 2:
0 BTC (75% probability)
+1000 BTC (25% probability)

It really isn't a EV case since this is a one time play, I think.

EV doesn't take care about the occurences; EV is +250 Btc on the option 2.

May be you ought to propose +250 BTC (100% probability) on option 1 to offer a real deal or decision versus current Option 2.



But anyway, this kind of greedy study and willingness to take risks has been already studied a lot of time.

The conclusions are these:

1) On winning, people react to be more conservative (take the short profit).
2) On losing, people are more about to take risks (prefer to gamble to avoid loses).

too lazy to find publications... but I'm sure there is a ton about that.
SgtSpike
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February 05, 2013, 06:41:21 PM
 #17

Would you rather have:

* $50 million US guaranteed
* 10% chance at $4 Billion US

2nd option is worth 8x the first, so you take that one?
I'd take the $50M hands down, every time.

On sums of money that are small enough as to be insignificant, I'd probably take the gamble if the odds were in my favor.  100 BTC is significant as well, so I went for the sure thing in that case too.  If the odds were more around 50% for 1000 BTC, then I'd go the 1000 BTC route.  A 75% chance of going home with nothing is just too great though.
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February 05, 2013, 07:25:43 PM
 #18

if you only can play once, why gamble? seriously this is simple math. if i could play more than once, of course i would chose the gambling since the reward would be much bigger, but u cant!

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cardinalG
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February 05, 2013, 07:48:44 PM
 #19

It comes down to whether you're a gambling type or not. It's +EV if this is chumps change, but probably life -ev if even the smaller amount would be very helpful to you.
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