A useful thing to keep in mind is that losing money is usually worse than gaining it. I wouldn’t take a 50⁄50 bet of either losing literally everything I own, vs doubling (or even tripling or dectupling) it.
Go look up the effect of money on self-reported happiness—try to make bets that maximize that, rather than the money itself.
Definitely true, but hugely asymmetrical bets like the lottery play on the qualitative difference between losing pocket change and the (tiny) chance of life-changing wealth. Lotteries are objectively bad bets because people in aggregate lose more than they win, but they can be subjectively good bets because individual losses are effectively zero for responsible bettors. People who play lotteries often speak of the fantasies of winning being worth the price of entry.
A useful thing to keep in mind is that losing money is usually worse than gaining it. I wouldn’t take a 50⁄50 bet of either losing literally everything I own, vs doubling (or even tripling or dectupling) it.
Go look up the effect of money on self-reported happiness—try to make bets that maximize that, rather than the money itself.
This is generally true for selfish goals, and a reason to be somewhat risk averse.
Definitely true, but hugely asymmetrical bets like the lottery play on the qualitative difference between losing pocket change and the (tiny) chance of life-changing wealth. Lotteries are objectively bad bets because people in aggregate lose more than they win, but they can be subjectively good bets because individual losses are effectively zero for responsible bettors. People who play lotteries often speak of the fantasies of winning being worth the price of entry.
Yeah, that’s the sort of bunk that good advertising can get people to say :P
EDIT: just remembered an Eliezer essay on this.