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View Poll Results: Suppose you're offered the flip of a fair coin, with the following provisions: Heads,

Voters
54. You may not vote on this poll
  • Less than $100,000

    4 7.41%
  • $100,000

    6 11.11%
  • $200,000

    8 14.81%
  • $300,000

    11 20.37%
  • $400,000

    9 16.67%
  • $500,000

    11 20.37%
  • $600,000

    1 1.85%
  • $700,000

    0 0%
  • $800,000

    0 0%
  • $900,000

    2 3.70%
  • You can't buy me off. I'm flipping no matter what.

    2 3.70%
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Results 27 to 39 of 95

Thread: A study in certainty equivalent, risk aversion, and utility

  1. #27


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    "That's about the only legit scenario under which to go for the toss."

    That's the whole point: NO IT ISN'T!! It may be the only legit scenario for YOU personally, but you can't possibly speak for Bill Gates and Warren Buffett, to whom $1 million is a tip to the shoeshine boy. Each has considerably more than 50,000 times $1 million!!

    If you had $50,000 to your name, and I asked you if you would take less than $1 to flip the coin, would you not think I was out of my mind? Of COURSE you'd flip for the dollar or nothing. Well, that "dollar" is ONE MILLION DOLLARS to Gates and Buffett, and they don't give a shit if they get $400,000, $700,000, or $1 million. That's the whole point of the exercise.

    Many of you write before you think. But, that's another exercise!

    Don

  2. #28


    1 out of 1 members found this post helpful. Did you find this post helpful? Yes | No
    Quote Originally Posted by Freightman View Post
    Your Wall Street friends are dealing on volumes, not singularities. Your own phrasing of the question suggests decisions among peons versus managers of huge currency funds.

    You need to rephrase your question if you want answers based on the math versus decisions based on emotion.
    THERE ARE NO ANSWERS BASED ON THE MATH. I already explained that! I want as many individual answers of a NUMBER as possible. I didn't ask for your personal stories or motivations. I asked for numerical answers, offering 11 categories. Choose one and vote. Period.

    Don

  3. #29


    0 out of 1 members found this post helpful. Did you find this post helpful? Yes | No
    Quote Originally Posted by DSchles View Post
    "That's about the only legit scenario under which to go for the toss."

    That's the whole point: NO IT ISN'T!! It may be the only legit scenario for YOU personally, but you can't possibly speak for Bill Gates and Warren Buffett, to whom $1 million is a tip to the shoeshine boy. Each has considerably more than 50,000 times $1 million!!

    If you had $50,000 to your name, and I asked you if you would take less than $1 to flip the coin, would you not think I was out of my mind? Of COURSE you'd flip for the dollar or nothing. Well, that "dollar" is ONE MILLION DOLLARS to Gates and Buffett, and they don't give a shit if they get $400,000, $700,000, or $1 million. That's the whole point of the exercise.

    Many of you write before you think. But, that's another exercise!

    Don
    I did think, and flipping is still the only logical choice if the bookies muscle is going to break your legs at noon.

    There's no way in hell that either Mr Gates or Mr. buffet would put themselves in the position of getting their legs broken - ergo, by extension, the poor schmuck in that position owes their bookie a million, and doesn't have the money.

    Now, if by chance, the poor schmuck has 100k, he will settle for 900k, or if he has 200 k, he will settle for 800k. These comments don't take into account any negotiation between the poor schmuck and his soft hearted bookie.

    You are the best when it comes to the dig. I look forward to the joust.

  4. #30


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    "But I did like Bosox's answer. If you were flipping for $2M, I'd take the $1M and walk because I probably wouldn't need the other mil in my lifetime anyway."

    Next poll coming up for more money! :-) (But the responses are already somewhat lower here than I had imagined. Different audience than the Wall Street crowd. Perhaps I should have started with a lower prize for heads.)

    Don

  5. #31


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    "You are the best when it comes to the dig. I look forward to the joust."

    There is no joust. Buffett and Gates don't need a contrived bookie story to flip (although I have already used exactly the same story for stating why someone might take even money on a huge blackjack, when the count didn't warrant insurance). It's almost certain that they would flip no matter what.

    Don

  6. #32


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    Don, Your poll is an interesting one.

    I think you have found an audience where the "utility" function skews the response more than the "risk" function, especially when compared to the wall street guys. If this were a "man on the street" poll I would expect even lower numbers as the risk component becomes larger AND the utility function is more valuable.

    Is it not just confirming the underlying premise of CE?
    Luck is nothing more than probability taken personally!

  7. #33


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    Quote Originally Posted by moses View Post
    Nope. I take blackjack even money at 33%. Refuse it at 32% without even a 2nd thought. Easy as pie. Hmmm. Who did I learn that from?
    The long term EV maximizing approach, possibly from Don. What about holding anywhere from 12-16 at 33%. What about a hard 20 at 32%. Are there parameters that will cause you to take a different approach.

    I know in the past that Bigplayer has supported insuring a hard 20, for example, below index. 3 has made some nice posts about risk averse insurance.

    Rejecting the minority who refuse insurance at true 2.99 on their hard 20's, to what effect does bankroll strength affect your decisions.

    I'm very cognizant that your answer is based on a limited spread not practiced by the masses. The question is directed more towards the masses playing regular dd pitch or 6d shoe games, and I would suspect that the answers to be influenced by strength of bankroll.

  8. #34


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    How big of a sample is relevant for you Don?

  9. #35


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    Quote Originally Posted by moses View Post
    Remember I know exactly the percentage and number of 10s that still remain. I don't want to derail the thread. But no on 12-16. 20 is also strictly a 33% threshold. I would do this even with a 1 to 16 spread at black chip level. But not at pink chip. I'm no Barry Seal. I throw up whenever I put 5 pinks on a sportsbet.

    Yes, my parameters coincide with the winability of the hand. I know this drives the one who don's a cape nuts. But I like to sleep at night.
    Then, by inference, you're playing with a strong bankroll with low ror.

  10. #36


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    Quote Originally Posted by moses View Post
    Hell, I dunno. Is that what I'm doing?
    Likely

  11. #37


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    Quote Originally Posted by Stealth View Post
    Don, Your poll is an interesting one.

    I think you have found an audience where the "utility" function skews the response more than the "risk" function, especially when compared to the wall street guys. If this were a "man on the street" poll I would expect even lower numbers as the risk component becomes larger AND the utility function is more valuable.

    Is it not just confirming the underlying premise of CE?
    If the poll had been for the man in the street, I wouldn't have made the top payoff $1 million.

    We'll see what is or isn't confirmed once everyone weighs in. My interest is in the actual responses, which demonstrate that, because of utility, CE, which varies, isn't just e.v., which is the same for everyone.

    Don

  12. #38


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    Don - I don't know if it's possible, but if a poll can be posted WITHOUT a comment section, that may be best for the next one :-)

  13. #39


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    Quote Originally Posted by 21forme View Post
    Don - I don't know if it's possible, but if a poll can be posted WITHOUT a comment section, that may be best for the next one :-)
    I take it you're suggesting fir both response as well as the OP?

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