Which button do you push?

Quote: Tiltpoul

Here's an interesting quiz: See how many dealers (outside of Vegas... eh, leave Vegas in the mix) would be able to tell you that the concept of taking "even money" is the same as taking insurance. I've gotten into many an argument with a dealer otherwise. In Illinois (or Missouri), it is classified as a separate bet, but other than the occasional dealer who actually halfway understand Spanish, I'd place the odds that less than 30% of dealers get the concept of even money = insurance.

As for the original question, for a million dollars, there is 0% chance I would ever consider pressing the green button. While a million dollars wouldn't change my life drastically, it would help it enough that I could pursue having a house, a car, etc.

If it were between 1000 and 100,000, I'd consider pressing the green button, if I knew it were truly a 50/50 chance to win 100,000.

Insurance and even money are the same, but it functions so differently in practice that making a manual insurance bet is seen as the separate bet is, while other is just a sure win that's locked in, for a reduced payout.

I see a LOT of the "Red Button' effect between manual insurance bets and taking even money. People lock in a sure win - Red button. Placing a manual insurance bet is like asking the player to press the green button.

Its a fanciful notion but if offered the opportunity I'd go for the green without any quibbling about needs or taxes or utility or marginal utility. A pauper dreams of a million dollars but if offered a dream of 100 million he will pass up the guaranteed million for the chance at that 100 million larger dream.

The reason it makes sense to consider EV first and foremost in the casino is that you're betting small amounts of money, many times. Even when you get a once in a lifetime opportunity, you'll get plenty more once in a lifetime opportunities of other kinds. Getting a truly once in a lifetime opportunity, for an amount most people would never dream of gambling, EV is irrelevant. It's the same reason you should think about hedging when you've "already" got a huge win.

Think of it this way: you have a million dollars, it's nearly all your money, and you're offered this gamble. Would you take it?

Or better yet, forget the million dollars. You're offered the opportunity, right now, to bet 90% of your net worth (let's assume for the sake of argument that this is positive) - house, car, wedding band, everything - for a fifty percent chance to multiply it a hundredfold. Would you take it?

Quote: Face

I don't technically have a house, the bank owns my truck, and the ex wife has pretty much everything else. I'd still take the million. The joy of a million subtracted by the sadness of no 100mil is greater number than the joy of a possible 100mil subtracted by the furious rage of blowing it and having nothing.

I didn't know EV could be measured subjectively, but you have shown that it can, I love it!!!

Quote: tsmith

Back to the buttons. Do you think the age of the person has anything to do with their decision on which button to push?

Of course. With 30+ more working years, I can make that million in other ways. US$1m is just 8 mil HKD, it's doable.

And I know exactly what I'd do with 100 million. Start a company that I want to start, do what I enjoy. It's not a whole lot of money. Split 30 mil to hard reserve (that will go to legacy if not required for emergency), 30 mil in investments, 10 mil personal allowance (for life, not for immediate use), finally remaining 30 mil for business.
Half that for hard costs, the other half labor. And 15 mil labor reserve is only really enough to maintain 10 employees at $150k each and 20 at $75k each (total cost, not salary) for about 5 years. A solid start, but just a start.

If I was old, haven't reached my entrepreneurial goals, and didn't have anyone in particular to leave that money to - then $1 mil is enough to provide a nice retirement. A country with mild pleasant climate, no government breathing down your neck, modest cost of living, enough money to afford occasional life's pleasures... What else does a retiree need?

Quote: P90

Half that for hard costs, the other half labor. And 15 mil labor reserve is only really enough to maintain 10 employees at $150k each and 20 at $75k each (total cost, not salary) for about 5 years. A solid start, but just a start.

It's actually 10 years, not 5 (150*10*10=15K).
I am curious. What is the business you have in mind that requires 200 man-years without any revenue to start up? What kind of profits do you expect from it eventually?

Quote: weaselman

It's actually 10 years, not 5 (150*10*10=15K).

I included 10 engineers, 20 technicians and laborers, for 150*10+75*20=$3M/year cost.

Quote: weaselman

I am curious. What is the business you have in mind that requires 200 man-years without any revenue to start up? What kind of profits do you expect from it eventually?

To skip technical details, it's along the lines of ground effect vehicles.
Time-wise - a year to break in the team and conceptual design, about two for preliminary and prototype testing, another for detail design, a year more to certify and market, with actual revenue starting the next, given some luck.

As for profits, without shareholders breathing down my neck, it's not critical to get quick net profit. Even so though there isn't such a whole lot of money in this market, even when mature it's a couple billion annual to spread between all players. High risk, long term, medium yield... not the sexiest investment.

Of course it's not like the amount above is the absolute minimum. There are ways to save costs - countries with cheaper labor, starting with small jobs, stock for investors, a less rushed schedule. Around 30 mil is simply what it takes to bypass this hassle and get down to business.

Is there any psychological reason the buttons were colored red and green?