Instant $1 Million or 50% chance of $100 Million

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    • #25585

      If you had the chance to press one of these buttons, which one would it be and why?

      source : pokerstrategy.com

    • #33265
      Rajat Agarwal
      Keymaster

      A nice question and a tough choice…Green has Expected Value of 50 Million but red assures you on $1 Million!

    • #33266

      Is this really a question?! People are willing to give up $49 million in EV?!

    • #33268
      richestuser
      Member

      QQ vs AK……pre flop…..50 million……Gambooooollllll….
      no guts no glory

    • #33271

      i ll b the nit and say i ll take the million.. thank you.. :)..

    • #33274

      Green and its not even close

    • #33275

      Vinay should we transfer the funds to your PS acc kindly post ur id below

    • #33281

      Ship it Danish .. :-p

    • #33506

      The answer to this question is not as simple as many think. IMO

      Ill elaborate in a future post when i have time, but ur personal utility plays a big role in making your choice,

      Put it this way there is EV expected value and there is EG expected growth, sometimes the best EV play is not the best EG play, not the same thing being discussed here but i will have to elaborate in the future (sunday).

      Meanwhile just think about this, you have AJ, a stack of 60 k and maniac is shoving any two every hand, even if ur last to act and close the action, its a tremendously hard call if ur working with say 4 lakhs (100 – 200) as ur working roll. I mean do u want to take 65 35 against donk here with 15% of ur roll or wait ….. maybe the hand and numbers are off, i promise ill come back on this in GREAT detail in this very thread.

      Suffice to say the best EV play is not the best EG play always.

      And ur goal my friends is primarily growth, not value.

    • #33827

      I don’t think ppl understand the concept of EV so well!! Expected value is significant when there are repeated events and law of averages ensure that random fluctuations average out and we can expect certain value!
      Expected value of a single event is not of any significance.

      Hence, this is a case of a sure shot $1 mill or a 50% chance of 100 million. Choice depends on individual risk appetite and utility function.

      Surprisingly though, lot of people will chose the red button here. This behavior is now well documented in behavioral finance studies and is known as loss aversion.

    • #33828

      @Vinay, Lets assume you are down $5 million in a day playing poker. Given the same options, will you still choose instant 1mill??

    • #33881
      Sachin Sinha
      Member

      I will happily take instant $1 Million and never regret it. Expected utility is what should drive the decision and not the expected value. In daily poker games, these two terms have almost the same meaning; so it does not really matter there. But, in this case, it does. An even extreme example: how about an Instant $1 Billion vs 50% chance of $100 Billion? Are people still wiling to decide based on EV? I guess not. People who make their decisions solely based on EV should read the St. Petersburg paradox just to see how misleading EV calculations could practically be.

    • #25586

      I will happily take instant $1 Million and never regret it. Expected utility is what should drive the decision and not the expected value. In daily poker games, these two terms have almost the same meaning; so it does not really matter there. But, in this case, it does. An even extreme example: how about an Instant $1 Billion vs 50% chance of $100 Billion? Are people still wiling to decide based on EV? I guess not. People who make their decisions solely based on EV should read the St. Petersburg paradox just to see how misleading EV calculations could practically be.


      @jagdeep
      I really didnt think deep enough on this .. didn’t wana whack my brain on it.. but agree with Sachin’s contention here.. another extreme example how about instant 100Rs v half chance at 5,000Rs.. I will take the half chance here..

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