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A comment on Why people make dumb financial decisions on purpose. Parent comment

Re:Why people make dumb financial decisions on purpose by anigbrowl on Saturday September 03, 2022 @01:30PM (#32704101)
EV is such a nonsense measure anyway once you step outside the realm of pure theory.

For example, the EV in this example (50% chance of $50m, or $0) is $25m. The EV of a 2.5% chance of $1 billion is also $25m, but your probability of getting nothing is 20 times higher. Is it more rational to choose this over the certainty of $1m? I don't think so. Is it rational to chose a 0.0025% chance of $1 trillion over $1m? At that point I think even the most avowedly rational economist would choose the cash.

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Re:Why people make dumb financial decisions on purpose by infinite8s on Friday September 16, 2022 @09:07AM (#32865576)
That just does to show that expected value is not the rational metric, but expected utility is.
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Re:Why people make dumb financial decisions on purpose by ghaff on Saturday September 03, 2022 @01:39PM (#32704186)
Increase the payout with a correspondingly lower probability and you're basically lowering the expected utility--down to some point where it crosses the sure-fire payout.
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