A Special One Time Offer!!!

[set57hike]

This is ridiculous.

Let's suppose Bill Gates made the same type of calculation. Let's say that Bill Gates would demand $498,000 to sit in a chair for 5 hours (this is in line with a very low estimate of the annual income he earns from his massive fortune). Let's further assume that he would also demand $2,000 for a $40,000 coinflip, as this is a completely arbitrary level of risk aversion.

This means Mr. Gates would need an expected value of $500,000 for it to be worth his time. So, by David's reasoning, Bill G. could counter offer Daniel N. a game at $1,085,000:$40,000 and then Bill G could claim that this proves that he believes he has a 48% or better chance of defeating Daniel N. Of course, Daniel N. is going to accept an offer like this! Why? Because, as pointed out by Ed Miller, a monkey could win frequently enough to give Daniel N. a negative expectation for this wager. If Daniel N. requires the same positive expectation of $3200 on his wager, he would have to believe that he would win more than 96.7% of the time to accept this counterproposal.

Come on David.... do you really expect Daniel N. to pay you for your time ($1200) and risk aversion ($2000) as you have done above, and then use that as evidence of your self confidence? Because demanding terms of 50/40 imply to me that you believe your chance of winning is 44 4/9%, not 48%.
This kind of argument works well for your own internal decisionmaking, but it doesn't work too well to convince people you are just a marginal underdog to Daniel N.

Honestly, this kind of event probably has an abstract value to both David and Daniel in the form of publicity and "goodwill". From this point of view, I could argue that David's counterproposal actually shows that he believes that he would only win 40% or more of the time, if I put an arbitrary value of $7200 to David on the publicity and notoriety of this kind of match. Heck... sell a DVD of the match and you might make more than this in real money instead of just "goodwill".