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A comment on Why Don't People Manage Debt Better?. Parent comment
Option A (snowball): Total Cost if successful: $X Likelihood of success: 90% (just making stuff up here)
Option B : Total Cost if successful: $Y Likelihood of success: 80% (again, making stuff up)
If 80% * Y + cost of failure > 90% * X plus cost of failure, even if X > Y, then a rational actor will choose Option A.
Sure, the "chance of success" is subjective, but ignoring it doesn't make the likelihood of failure go away.
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Option A (snowball): Total Cost if successful: $X Likelihood of success: 90% (just making stuff up here)
Option B : Total Cost if successful: $Y Likelihood of success: 80% (again, making stuff up)
If 80% * Y + cost of failure > 90% * X plus cost of failure, even if X > Y, then a rational actor will choose Option A.
Sure, the "chance of success" is subjective, but ignoring it doesn't make the likelihood of failure go away.