I’m probably way late to this thread, but I was thinking about this the other day in the response to a different thread, and considered using the Kelly Criterion to address something like Pascal’s Mugging.
Trying to figure out your current ‘bankroll’ in terms of utility is probably open to intepretation, but for some broad estimates, you could probably use your assets, or your expected free time, or some utility function that included those plus whatever else.
When calculating optimal bet size using the Kelly criterion, you end up with a percentage of your current bankroll you should bet. This percentage will never exceed the probability of the event occurring, regardless of the size of the reward. This basically means that if I’m using my current net worth as an approximation for my ‘bankroll’, I shouldn’t even consider betting a dollar on something I think has a one-in-a-million chance, unless my net worth is at least a million dollars.
I think this could be a bit more formalized, but might help serve as a rule-of-thumb for evaluating Pascal’s Wager type scenarios.
I’m probably way late to this thread, but I was thinking about this the other day in the response to a different thread, and considered using the Kelly Criterion to address something like Pascal’s Mugging.
Trying to figure out your current ‘bankroll’ in terms of utility is probably open to intepretation, but for some broad estimates, you could probably use your assets, or your expected free time, or some utility function that included those plus whatever else.
When calculating optimal bet size using the Kelly criterion, you end up with a percentage of your current bankroll you should bet. This percentage will never exceed the probability of the event occurring, regardless of the size of the reward. This basically means that if I’m using my current net worth as an approximation for my ‘bankroll’, I shouldn’t even consider betting a dollar on something I think has a one-in-a-million chance, unless my net worth is at least a million dollars.
I think this could be a bit more formalized, but might help serve as a rule-of-thumb for evaluating Pascal’s Wager type scenarios.