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#71
03-21-2005, 04:11 PM
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Re: How much gamble do you have in you?
[ QUOTE ]
Ks 7s 12 1.21 969 97.88 9 0.91 0.017 As 5s 969 97.88 12 1.21 9 0.91 0.983 ; 0 [/ QUOTE ] Whoa... my stupid meter is going wild. Some of these replies are so dumb I'm actually getting angry. The textbook answer is you accept the bet only if your life is worth less than the expected value of the bet (.983*100,000 = $98,300). The OP was asking "Are you willing to accept this -EV bet?" To answer this reasonably, you'd have to determine: 1. How many more times in my life am I going to get this offer? 2. Am I risk averse enough to reject this bet? and if the answer to #1 were 0, my answer to #2 would be no and I'd accept. 
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#74
03-22-2005, 12:46 PM
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Re: How much gamble do you have in you?
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Let's see I make 120k per year (not playing poker), x 35 years left = 42million. 100k is way too small. Maybe 100million factoring in quality of life, sex, etc. If I was poor I might consider shooting him and stealing the 100k - has much better EV. [/ QUOTE ] 4.2 million. So now do you do it for 10 million?
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#75
03-22-2005, 04:58 PM
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Re: How much gamble do you have in you?
[ QUOTE ]
[ QUOTE ] Ks 7s 12 1.21 969 97.88 9 0.91 0.017 As 5s 969 97.88 12 1.21 9 0.91 0.983 ; 0 [/ QUOTE ] Whoa... my stupid meter is going wild. Some of these replies are so dumb I'm actually getting angry. The textbook answer is you accept the bet only if your life is worth less than the expected value of the bet (.983*100,000 = $98,300). The OP was asking "Are you willing to accept this -EV bet?" To answer this reasonably, you'd have to determine: 1. How many more times in my life am I going to get this offer? 2. Am I risk averse enough to reject this bet? and if the answer to #1 were 0, my answer to #2 would be no and I'd accept. [/ QUOTE ] I still think that the "textbook" answer is to only take the bet if it is +EV. To be +EV, your life must be worth less than $8,075,000. Also, you obviously have to be OK with the variance of the bet as you mentioned... ROR takes on a whole new meaning...
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#76
03-22-2005, 10:53 PM
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Re: How much gamble do you have in you?
Yes, but if I lose, I welch.
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