How about no, because I prefer my stability and I don’t want to track random bets on stuff I don’t care about?
Apply marginal utility and a 50⁄50 coin with the opportunity to bet a dollar, and you’ve got 50% chance to, say, gain 9.9998 points and 50% chance to lose 10 points. Why bother playing?
The only reasons to play are is if an option is discounted (4x payout for heads and 1.5x payout on tails on a fair coin), if you don’t care about the winnings but about playing the game itself, or if there’s a threshold to reach (e.g. if I had 200 dollars then I could do payoff something else which would avoid the deferred interest from coming into play, saving me 1000 dollars, so I would take a 60% chance to lose 100 dollars because those extra 100 dollars are worth not 100 but 1000 to me).
Plus there’s always epsilon—“the coin falls on its side” or other variations.
I’m not suggesting that people actually do this, just that this is a sensible assumption to make when laying the mathematical foundation of rationality.
How about no, because I prefer my stability and I don’t want to track random bets on stuff I don’t care about?
Apply marginal utility and a 50⁄50 coin with the opportunity to bet a dollar, and you’ve got 50% chance to, say, gain 9.9998 points and 50% chance to lose 10 points. Why bother playing?
The only reasons to play are is if an option is discounted (4x payout for heads and 1.5x payout on tails on a fair coin), if you don’t care about the winnings but about playing the game itself, or if there’s a threshold to reach (e.g. if I had 200 dollars then I could do payoff something else which would avoid the deferred interest from coming into play, saving me 1000 dollars, so I would take a 60% chance to lose 100 dollars because those extra 100 dollars are worth not 100 but 1000 to me).
Plus there’s always epsilon—“the coin falls on its side” or other variations.
I’m not suggesting that people actually do this, just that this is a sensible assumption to make when laying the mathematical foundation of rationality.
Sure, but what Pimgd is pointing out is that it does not model rational behavior very well. Don’t build a mathematical framework on shaky foundations.