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99% chance of winning $1000
Posted:
Thu Oct 29, 2015 10:26 amby Stratego
Let's say you were involved in a game where you currently have 99% chance of winning $1000.
a) You were given a chance to pay to pay a certain amount to raise that winning odds to 100%, how much would you pay?
b) How much would you pay to raise the odds to 99.99%?
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 10:32 amby spacemonkey
37 cents.
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 10:48 amby Winchester
a)$9.99
b)$9.89
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 12:07 pmby Stratego
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 1:02 pmby Winchester
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 1:29 pmby Dylan
Expected value masterman IN THE HOUSE
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 1:35 pmby Saz
20 for 100% chance 10 for 99.9
RISK AVERSE
Re: 99% chance of winning $1000
Posted:
Thu Oct 29, 2015 1:49 pmby Dylan
I probably would too Saz, likely more. EV is cool and all but at the margins of likelihood itss utility decreases.
E.g., the EV for a lottery ticket is usually above the cost. But it's still a low value proposition obviously.