Reminder answers 3 and 4 are the same

>ITT idiots looking at only the mean and not the variance.

how does it feel to be retarded?

Honestly I'm being hounded by every ethnic mob possible for previous actions I allegedly commit. You name it I got it

>Reminder answers 3 and 4 are the same
0% chance to win $0
50% chance to win $0
90% chance to win $0
99% chance to win $0

3 and 4 arent the same, if i assume that i have only 1 try.

I'd probably go with 3)

Although I made 200k with bitcoin recently, so for not taking 4) I should come up with some sort of opportunity cost argument..

teach me

What's the red asterisk for?
Also 50% chance for 1K is mathematically the best option.

Brainlet

Option 1. Thanks for the free 100 dollars motherfuckers.

Buy now. It's bound to go up eventually.

What happens if we lose?
Do we have to fork over the same amount we might have won?
Makes a MAJOR difference in my betting strategy.

>Only if you don't take into account the marginal utility of money
This so much. I hate these questions as some sort of proof of irrationality.

1 or 4 are the best as i could get 2 and 3 with 100% chance by working for a few days/weeks.

how often can i choose?

3 and 4 are not the same. And the "correct" answer depends on context. We can't just look for maximum EV and say "this is correct".

What if you've got three kids to feed who haven't eaten a thing in 4 days and you have no money. In this case answer A is the correct choice, while most of you would say that answer A is obviously false.

The question is stupid.

50% at 1000 easily.
I'll just put it in XRP and wait for another 400% gain

2

If you're very rich, you'd probably go with the fourth option
I value 1000$ more than them, so I would pick the second option

I would say that the 4th is the inefficient choice since the expected value that you can obtain is 1000$, however the standard deviation is 9949.87 while in the 3rd choice the standard deviation is just 3000$.
For the first three options, the choice depends on the risk attitude: for the first one you obtain 100$ certainly, with the second one you obtain 500$ with a 500 standard deviation and with the third one you get 1000$ with a 3000 standard deviation.

50%

They're only the same if you get unlimited goes and are scored based on your total return after those goes.

For a one shot deal you're much better off not being greedy and taking the option that is 10 times more likely.

If you have a job and aren't a studentfag then $1000 is nice but not life changing. $10,000 on the other hand would significantly affect your year. I'd gamble on that.

for a one shot deal B
>50% vs 10%
the probability is just so much higher

Yes but like I explained I'm in full time work and $1000 wouldn't make a huge amount of difference to me, whereas a 10 grand lump would be worth a shot.
It would be far more appealing to a student who is skint and for whom a 50/50 shot at being able to eat comfortably between post-docs without having to look for a side job working as a phone salesman would sound like a great deal.

well yeah I am a student, 1000$ would change my life

10%

The excess risk does not give any gain in expected value, and 1000 would not be noticable right now.

check the variance

Would you rather take one in a million chance to get $1,000,000, or certain $1?

The latter obviously. And if you're from the ghetto and don't know if you'll be able to eat tomorrow you'll probably take the guaranteed $100 cos poor people can't or aren't afforded the luxury of riskier but bigger payoffs

100k easy
the trick is that the probabilities are listed wrong
whichever option you choose, the odds are 50-50, either you get the money or you dont
why bother with the smaller amounts?

wtf i love lottery tickets now

Wut

Use the 100 to buy a gun and come back because the guy has 100k sitting around.

Thing is, happiness is not linearly correlated with wealth. It's more logarythmic above some point. So if I'm a poorfag who makes 10k a year (2nd world ftw), the additional 10k will on average make me more happy than a 10 times smaller chance to get 100k.
To illustrate, would you rather take 100% chance to get 1 billion dollars or 10% to get 100 billion?

>whichever option you choose, the odds are 50-50, either you get the money or you dont
>1% chance to win
>50-50

This question is the best way to introduce poker equity and even variance.

Option C is the best.

Payout of C:
C = 10•B

Probability of C:
[math]C_{p}=5•B_{p}[/math]

C is twice as good as B.
B is 5 times better than A.

C protects against variance relative to D.
There would be reasons to choose D sometimes.

Suppose D increases the frequency of the occurrence of C. If we never went with D, then the chance of being offered the optimal decision declines.

>Reminder answers 3 and 4 are the same
No, they're not. C gives you 0% chance of winning $100,000.
>b-b-but 10,000x10=100,000!
Then the chance of getting 100,000 is 0.00000001%

1% chance at 100,000. There is no risk for me if I lose

Hmm, that is a very good point.

The additive sum of payouts are equivalent over x trials.

Your point is good in that, how do we know we are ever going to be offered these odds again?

Suppose we don't know that C is always going to be 10%, D can be a better option in that case as well.

I don't care about what's the "better" choice. That's completely subjective. I'm just saying C and D are not the same at all.

>he doesnt know basic probability
either something happens or it doesnt, so there is a 50% chance of it happening

>Joke flying over someone's head.webm
Unless this is some meta-pretending-to-be-baited-bait, in which case pic related

rollin for b

this, kek