An offer you can't refuse?

[steveyz]

Inspired by a NL forum thread where a guy was scared to go all-in pre-flop with AA in a cash game.

Say you are given $X with no strings attached. You are then given an one time oppurtunity. You can risk ALL of $X for an 80% shot at winning $2X.

How large does $X have to be such that you would refuse the offer? What if it was an 60% shot or a 99% shot?

[Bulbarainey]

at 1million, I could buy a decent house, with 100K i couldnt around here, so I wouldnt risk 60% on that, but as far as the 99% goes, Id do everything except 100mil, because at that point,you and youre whople family are set for life, and there are a lot more investments open where you could easily 2x it up in a couple of years, such as large land developments

[Yeti]

Dumb question. Maybe if the choices were % of your total wealth instead.

[steveyz]

I thought about that, but for many people, esp college students or recent grads, their total net worth is 0 or negative so that wouldn't really work out. I think it's still better phrased this way.

Actually you can think of it in your way as well. If you are worth $100,000, and are given $100,000 to risk for $200,000, you'd be risking 50% of your wealth. If you are given $1 mil for $2 mil, you'd be risk 9% of your wealth, etc etc etc

[YourFoxyGrandma]

There is a cut and dry correct mathematcial answer to this question.

[manpower]

[ QUOTE ]
There is a cut and dry correct mathematcial answer to this question.

[/ QUOTE ] A little help?

[TStoneMBD]

id do 300k at 60%, but nothing more than that.

i would do 1million - 5 million on the 80%.

i would do 10mill-100mill on 99%.

anything above that seems ridiculous. i cant fathom what the differences are between 100million and 200million. besides, one way that people should be looking at the situation is that even if you did have say 3 million dollars, you are going to have to invest it. nearly all investments have at least a little risk. an investment with 100% rate of return with 1% risk of ruin is really hard to come by.

regardless, if this situation actually arose, i would certainly spend countless hours devising long term strategies for myself to decide exactly whether i should take the offer or not. if i had to decide these things on the fly, these would be my answers.

[Thythe]

[ QUOTE ]
There is a cut and dry correct mathematcial answer to this question.

[/ QUOTE ]

Not really, unless you know a person's risk utility curves.

[YourFoxyGrandma]

[ QUOTE ]
[ QUOTE ]
There is a cut and dry correct mathematcial answer to this question.

[/ QUOTE ]

Not really, unless you know a person's risk utility curves.

[/ QUOTE ]

You're right. Though, in terms of EV there's a clear answer. But I guess everybody here knows that.