I know this was posted 4 years ago, but I had a thought. If I was offered a certainty of $24,000 vs a 33⁄34 chance of $27,000, my preference would depend on whether this was a once-off. If this was a once-off, my primary concern would be securing the money and being able to put food on the table tonight. Option 1 will put food on the table with 100% certainty, while Option 2 will not.
If, however, the option was to be offered many times, I would optimise for greatest return—Option 2. If I miss out this month, I’ll just scrape for food until next month, when chance are I’ll get the money.
I think I just answered my own question. If my goal can be reached with $24,000, then Option 1 is the best one because it reaches the goal in one guaranteed fell swoop. However, if my goal is to make lots of money, then Option 2 is the way to go, because it makes the most over time.
It absolutely can make sense to prefer option 1A over option 1B (which I think is what you mean). What does not make sense is to prefer option 1A over 1B, AND prefer 2B over 2A. It’s worth reading the two followup articles before you get into this further: Zut Allais and Allaise Malaise. Welcome to Less Wrong!
I know this was posted 4 years ago, but I had a thought. If I was offered a certainty of $24,000 vs a 33⁄34 chance of $27,000, my preference would depend on whether this was a once-off. If this was a once-off, my primary concern would be securing the money and being able to put food on the table tonight. Option 1 will put food on the table with 100% certainty, while Option 2 will not.
If, however, the option was to be offered many times, I would optimise for greatest return—Option 2. If I miss out this month, I’ll just scrape for food until next month, when chance are I’ll get the money.
I think I just answered my own question. If my goal can be reached with $24,000, then Option 1 is the best one because it reaches the goal in one guaranteed fell swoop. However, if my goal is to make lots of money, then Option 2 is the way to go, because it makes the most over time.
That make sense to anyone?
It absolutely can make sense to prefer option 1A over option 1B (which I think is what you mean). What does not make sense is to prefer option 1A over 1B, AND prefer 2B over 2A. It’s worth reading the two followup articles before you get into this further: Zut Allais and Allaise Malaise. Welcome to Less Wrong!