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/sci/ - Science & Math

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5102247 No.5102247 [Reply] [Original]

/sp/ desperately needs your assistance

>>>/sp/26261147

>> No.5102260
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5102260

>scroll through thread with mostly retardation and trolling
>second half of thread has a couple business majors measuring their dicks and spouting stuff they learned in economics 102
>suddenly...

>ITT: People who haven't heard of Kahneman or Tversky.

Even if he only knew the names and nothing else, I'm still moderately impressed.

The mathematically sound answer is green, I'd choose red though.

>> No.5102257

You could accumulate $1 million by being careful with your money and being opportunistic. $100 is special.

>> No.5102258

What do they need our help with?

More opinions? Personally I'd go with red, but I don't see how that's going to help any one.

>> No.5102265

>>5102257
Lol no. Even if you made $100k a year, it would take you 10 years to make $1mil and that's if 100% of your money is saved.

I would rather just get the 1mil now, save myself several years of being a cheap ass, and live very comfortably for the rest of my life.

>> No.5102266

>>5102260
>The mathematically sound answer is green
Only if you decide that the expected return is a good measure of "what's a good idea". Which is often isn't.

Say, for instance, that you need to pay off a $500,000 ransom in 24 hours or die. The red button is the correct answer.

>> No.5102267

>>5102265
> live very comfortably for the rest of my life.
Uh, you'll have to invest that $1M very carefully if you want to "live very comfortably" off the interest. Just how much were you planning on spending each year?

>> No.5102274

>>5102267
I naturally just don't spend a lot. I don't drink, don't blow my money on useless junk. I only buy things that last me.

But I don't try to save money, that's just my lifestyle and it happens to result in me spending very little. Of course that would change dramatically if I got married or something...

To be honest I'm second guessing myself, I might go with the green button.

>> No.5102277

as a young college student, fucking red.

put that shit in a high interest account so that when I'm done with my education I have a decent nest egg.

>> No.5102282

Red all day erry day. You'll just live in disappointment and suicidal thoughts for the rest of your life should you lose the $100 million.

>> No.5102292

>>5102282

I never thought about that, if you flunk the 100m it must feel absolutly devastating and you get reminded about it every time you have to deal with money. Which is pratically every day. Still how do you live cmfortably from one million? There is like 1-2% inflation every year and bank accounts(100% secure) off like 4% max? That leaves you with just 20k per year...

>> No.5102293

>>5102267
Not the same person, but my poor ass received around 30K income last year. So obviously I spend less than that. Even without interest that would make 1 million last around 33 years. Wouldn't be an entire life, but it's plenty.

>> No.5102317

>>5102293
Problem is Human Nature. People will change their spending habits when they have a large amount of money sitting around. Unless you have an Iron will you will be spending much more than 30k a year.

>> No.5102327

>>5102247
Red + Invest it properly + continue to Work hard + let it grow = A awesome retirement and easy life.

>> No.5102336

>>5102327
Thing is, if you continue to work hard anyway you'll probably end up with a decent life with or without the extra million.

On the other hand 100 million means you're set for the rest of your life without having to do jack shit.

Green button, some people will say "if you blow it you'll think about it every time you spend money" but the way I see it is if I were to pick red and continue working every day I work I'd be thinking "I had a 50% shot at never having to do this again".

>> No.5102339

>>5102336
I'd still be working even if I got 100mil. Cause if I didn't I'd end up spending the 100mil in a few years.

>> No.5102345

Correct answer: double click on green.

/threads

>> No.5102346

>>5102339
What the hell would you even buy to go through that in a few years?

>> No.5102349

1 million.
That's a huge amount of money.

>> No.5102355

>>5102336
If you invest and make an average of 5% a year, that's $50,000 per year without any work.

>> No.5102359

>>5102346
Probably the same stupid shit that most lottery winners waste their money on.
If you fly first class around the world, stay in top notch hotels drinking thousand dollar bottles of wine like beer, and buy expensive sports cars then 100 million dollars can go fast.
Or even ones trying to be smart can end up losing it all by investing it poorly or being conned

>> No.5102361

I'd take the red button. 1m is plenty for me and what I need, although a 50% chance at over 100 times the original offer is significantly better considering the odds.

I'd feel like I shot myself if I lost the green button roll knowing that I could've had 1 million. I am not a gambling man.

>> No.5102362

>>5102355
Before tax.

>> No.5102364

green button, expected value etc.

>> No.5102365

I push the green button twice

No, three times.

Wait.. wait... wait... four times.

>> No.5102367

>>5102260
>mathematically sound
Are you in the other thread? Exact same quote, same response I gave that guy.

Not really. The actual result you want isn't "most money," it's "most utility," and money is not the same thing as utility.

For example:
100% chance of 100 mil dollars.
50% chance of 300 mil dollars.

The expected value is 100 mil vs 150 mil; but is that extra 50 million really worth the chance of any failure, at all? Hell no, you'd have to be stupid.

For most people, the utility of money per unit of money goes down as the quantity of money goes up. At some point, the chance of failure stops being worth the extra cash because "that's enough for me to accomplish my immediate life goals, and those goals are more important to me than having a yacht on the side."

>> No.5102368

>>5102365
fuck it, just push the red button n times for n million dollars 100% of the time dude

>> No.5102369

>>5102368
the green button reaches infinity first butt head

>> No.5102374

>>5102369
holy fuck but infinity isn't actually a value you can reach you bastard, if you could press it infinitely many times than who gives a fuck whats faster, you have infinite time.

>> No.5102375

>Red button
Not rich, but enough to buy a house and live comfortably (provided you keep working).
>Green button
Enough money to make you lose all sensibility and eventually fuck yourself over. $10,000 an hour hookers? Sure, I'm fucking rich, man!

>> No.5102377

obviously 100 million is much better but i would definitely take the 1 million.

currently i spend about $3000/month on rent, bills, food and drugs.

the interest rate is 5% here. compound interest on $1,000,000 over 20 years while still withdrawing $3k/month would come in at just shy of $1.5m.

though i would probably continue working anyway and spend all of my income, in which case i'd have $2.7m after 20 years

in b4 capital gains.

>> No.5102388

Definitely green. I don't feel bad about my current financial situation so if I don't end up getting the money I'm not all that worried.

>> No.5102391

>>5102388
>not worried about losing $1m

just how comfortable are you, romney?

>> No.5102393

>>5102391
I don't really see it as losing any money since it wasn't mine to start with.

>> No.5102395

green

>> No.5102397

both are chump change to me :3

>> No.5102401

>>5102317
I have nothing to spend it on. I have no hobbies. I don't want to travel. I don't go out for food. I don't go out with friends. I don't have friends. I don't know how to drive, have no license, and have no intention of getting one. I don't watch tv. I just like to stay home.

>> No.5102407

>assuming only one "roll of the dice" ever.
guaranteed option of "free" sustainability for life, including future generations (especially considering the land, etc, that can be obtained) vs. 50/50 chance of exorbitant potential and influence.

assuming current wealth and future potential is a small enough fraction of the payout....red pill every time.

>> No.5102419

If you can get a savings account which returns 2% above inflation per year, 1 million dollars gives you the equivalent of a 20 k$ salary for the rest of your life without ever touching it. Basically, you have a 20 k$ salary, and whenever you want, you can say "fuck the salary, I want my million dollars instead" and get the (inflated) million dollars.

20k isn't huge but it allows you to live without working, or have a really nice salary if you choose to work. If you choose not to work, don't forget that it's better than a 20k salary for a job, because jobs usually have expenses (transportation mainly, but also sometimes lunches more expensive than home lunches etc), so you're saving that money.

I'd definitely go for the red button. 1 million gives me an awesome life, the green button has a chance to give me an even better life but it can fail, and the difference wouldn't be that big for me. I need money to eat, pay my rent, oil, electricity etc, and have some left for hobbies, but I wouldn't know what to do with 100 millions. They'd probably be wasted in a bank account without me doing anything about them.

>> No.5102427
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5102427

>>5102247
>Red
>Life instantly awesome
>100%

>Green
>Life reasonably as awesome as pressing the red button
>50%

>> No.5102429
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5102429

>>5102419
>If you can get a savings account which returns 2%
Get some dividends man.
2%?
>ISHYGDDT

>> No.5102448

>Red
>Buy a nice house, nice car, nice things, still have to work to live

>Green
>Buy a mansion with staff, a yacht, a solid gold statue of yourself, invest 20%, never have to work again, earn another $1m every year.

>> No.5102451

>>5102429
yeah, seriously, start a business, etc.

>Get some dividends man.
some foreign (esp. asian) companies give sufficient dividends plus additional stock.

>> No.5102461

economics ISN'T a science

>> No.5102472

>>5102461
hello what are statistics

>> No.5102474

>>5102472

not science?

>> No.5102479

>>5102472
>>5102474
plus probabilities

>> No.5102484

>>5102451
You wouldn't need to do anything that risky to beat a rate of 2%.

>> No.5102487

I'd pick red, because that's all I need.

It's like having 2 buttons.

Red button: 100% you get 100,000 free buffet lunch coupons.

Greed button:50% you get 1,000,000 free buffet lunch coupons.

>> No.5102496

>>5102484
agreed

>> No.5102499

and this is why economics is a social science.

>> No.5102529

>that feel when you green but don't win

>> No.5102535
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5102535

>>5102529

>> No.5102569

Why not press the 1Million button 100 times.

>> No.5102579

>>5102569
why not press the 100 million dollar button 100 times, 50:50 chance each time, get on average 5billion instead of 100 million

>> No.5102580

>>5102277
>high interest account

no. just no.

savings accounts pay a very very low amount of money, you would be better off investing in government bonds (if you want the safe route), or an index fund

>> No.5102591

Red, simply because I'd rather 100% odds than 50%. Yeah, you may not be able to buy a mansion and cancel work forever but your still going to be able to get a nice house, pay off the mortgage and still have a little left over for a rainy day or something.

And like everyone else said, most people would go nuts if they suddenly got 100 million. New house? No problem! Car broken down? Trash it and get a ferrari! Hey, why don't we go on holiday too? First class! And we'll get a housemaid and go to restaurants a lot more, and buy all those things we wanted and give all our friends cash whenever they need it.
Shit, most people'd bleed money for a year and then go back to what life was like before.

>> No.5102597

>>5102591
Meh. I don't need the money. May as well go big. I'd try for the 100 million and if I win I'd invest 99 million of it in Asteroid mining and the remaining one million in some franchise restaurants.

>> No.5102598

>>5102580
>you would be better off investing in government bonds (if you want the safe route),

treasury bonds currently have a rate of 0.76%

>index fund

wut

if you had put $1m into the S&P500 10 years ago, it would now be worth about $960,000. at its lowest it would have been worth just under $500,000. even if you cashed out at the peak, it would have been worth $1.05m, still a loss due to inflation.

if you had put it into a 5% savings account 10 years ago, it would now be worth $1.7m.

>> No.5102621

>>5102598
S&P was around 800 in late 2002, its 1400ish now.

>> No.5102623

>>5102621
excellent point. i dragged the slider back to 2000 rather than 2002.

what a difference 2 years makes.

still, just further proves the risk.

>> No.5102635

>>5102247
>get 1 million
>buy houses with multiple bedrooms
>rent the rooms
>earn $60 000 a year for doing nothing
>rinse and repeat

>> No.5102645

>>5102635
>get 100 million
>buy houses with multiple bedrooms
>rent the rooms
>earn $6 000 000 a year for doing nothing
>rinse and repeat

Where is your god now?

>> No.5102648

>>5102645
or don't get the money a continue on with your pathetic life

>> No.5102656

>>5102648
>and the /pol/ comes out of me
why leave the basement?

>> No.5102670

yeah but a 20k/year bonus (assuming it's 1 million after taxes) for doing nothing but pressing a button is awesome. You get to live a pretty decent life, and when you retire it's like getting a pension

I'd take the 1 mil always and forever.

>> No.5102677

Obviously I sell shares in the outcome of hitting the green button to hedge my bets.

>> No.5102678

I don't think having a ton of money would really change how satisfied I am with my life, since I already have more money than I really even know what to do with, and I really enjoy my work. I guess I would travel more.

For this reason, I would go big or go home.

>> No.5102685

>>5102678
>I already have more money than I really even know what to do with
care to include me as family, with a common purpose of survival plus happiness?

>> No.5102703

Depends,

if I'm on my own, red. Sure, green's got a higher expected value and I think the odds are rather in my favor, but the red button offers certainty and plenty of money to live comfortably for a few decades.

If I can work with, say, 4 mates: go all green and split the gains. If even 1 of them wins, we get at least 20 million each. Odds of complete failure and getting nothing are 1/32.

>> No.5102709

>>5102703
>If I can work with, say, 4 mates: go all green and split the gains.
> Odds of complete failure and getting nothing are 1/32.
i would still go red

>that feel when a poker player and the odds (the universe) don't care...and you can/will still lose even when in your favor.

>> No.5102710

Green, every time.

>> No.5102714

>people ITT seriously not pressing green

>> No.5102721

What you do is arrange things with an insurance company. If you push the green button and you get the money, you pay them, say 30 million of it. If you push it and don't get the money, they pay you 20 million.

The insurance company would be happy to take those odds, and you get more than enough to survive either way.

>> No.5102725

>>5102721
>What you do is arrange things with an insurance company.
my man (wish this was pol for a better phrase)...that's what i'm talking about. you be thinkin.

>numbers are a bit off, but definitely will get more than $1 mil.

>> No.5102729

>Ctrl + F
>risk aversion
>0 results
>prospect theory
>0 results
>Kahneman
>1 result

I have no face

>> No.5102733

1 million is good but not a life changer.

Thus, red would be my choice

>> No.5102746
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5102746

>>5102721

You. I like you.

>> No.5102748

>>5102729

I think most of us here know about concave utility functions and shit, and just don't want to admit they learned it all from lesswrong

>> No.5102754

It depends on your utility function, which depends on your aversion to risk. For some people, not getting any money while knowing they could have gotten $1 million causes infinite displeasure, so for them it would be a rational choice to press the red button.

>> No.5102758

>>5102266
While I agree with the sentiment your example is off.

If one were to include how much they value their life into the calculations, the expected value of the second would actually be worse than the first.

>> No.5102768

>>5102247

Green is better on average, but you can't eat averages. So easy answer, sell the risk.

Create a pool of investors who are willing to take the gamble, offer (100-X)% of green in return for X% up front paid to me.

Even if the split is 2 million to me and 98 million to investors, I've created an outcome superior to red in every way.

>> No.5102788

>>5102768
Less they pay, more they get?

I'll pay you 0% up front for my (100-0)% later.

>> No.5102793

>>5102703
But no one guaranteed you that the outcomes of pushing the button were independent ?

>> No.5103141
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5103141

I would destroy both buttons and set myself on fire in protest of the oppression of Tibet

>> No.5103160

Red button:
1 million = 100%

Green button:
100 million = 50% |x2
200 million = 100%

Green button obviously.

>> No.5103166

>>5102768
You might want to double check your model. Something simple should be like 100-(100/X)%, X!=0

>> No.5103208

The expected return is a good measure only if you can push it more than once. If I only got to press one button and only once it would be red.

To work your way to one million requires a lot of time, and I wouldn't want to have wasted this chance. However, if I had much more money than I do now (and less problems money can solve), I'd take my chances with green.

>> No.5103247

Studies show that beyond 65,000 a year extra money doesn't make you happier.So red every time.

With green I have a 50 percent chance of having the most disappointing moment in my life as well.

>> No.5103260

No one should be allowed to push the green button. We'd just have a society of broke people going around begging for money from people with one million, and then, cut from the same cloth as these beggars would be our leaders.

I, for one, don't welcome our new retarded risk taking overlords.

>> No.5103262

>>5102260
Expected return doesn't matter if there's only one trial and it's everything or nothing.

>> No.5103274

Would anyone like to engage in a contract with me? We could get together, form a group, and have some people push the green button, and some people push the red button. Whatever money we acquired would be split evenly.

How do we maximize our winnings?

>> No.5103283

>>5103274
If everyone gets a chance and you all split evenly, everyone pushing the green button is best.

>> No.5103293

>>5103283
Yeah, I realized that as soon as I posted it -_-

So, whoever entered into this agreement would become the new overlords.

There would be no point in entering into an agreement like this with someone unless you were sure that they weren't going to double cross you, so only people known to be altruistic would get the money.

I, for one, welcome our kinder, gentler overlords.

I'd still want a harem of teenage girls, though.

>> No.5103312

Green all day erryday. 1 million really isn't that difficult to obtain through hard work, risk, and smart investing and management. 100 million is practically impossible. And your a weak shit if you get depressed and suicidal for losing. That's life, you took a shot, you lost. Join the 99% of humanity through the ages that has failed.

>> No.5103364

>5103312

If it wasn't that difficult then everybody would be doing it.

>> No.5103371

>find rich person
>sell them the winnings green button bet for $40million

>> No.5103394

>>5103274
>>5103283
>>5103293
Not necessarily see:
>>5102793
Assuming Independence of variables is how we got into a mortgage crisis

>> No.5103402

>>5102247

With 100 million I could take over the world in the next 50 years. Green button it is.

>> No.5103410

I would gather around 10 people and make them all press green button. We'll then share the loot.

>> No.5103413

>>5103410
stop assuming things!
see:
>>5103394
You can't assume that things are IID.

>> No.5103414

>>5102367
> The actual result you want isn't "most money," it's "most utility," and money is not the same thing as utility.

Best reply to this pic I've seen.
People can't into utility. :(

>> No.5103418

>>5103414

Because 1 million isn't enough for some people. 100 mill. vs. 300 mill. is a different question.

And 1 million won't go THAT far.

>> No.5103428

50-50 chance.

I'm greedy, and almost every human is naturally greedy, most of us will probably choose the green button. Its in our nature.

If the benefits outweigh the risks, then it is a better deal. Its how our brains work. GREEN MOTHA FUKA!

>> No.5103432

>>5103428
that's not how the brain works, the brain is very bad at measuring risk and reward.

>> No.5103441

>>5103432
>Big reward.
>Little to no risk to the average person.

The worst thing that would happen is you go back to your normal life if you loose. The best thing that happens is you become the next Bill Gates and have some money left over to spare. I just assume everyone that was put in this situation would realize that 50-50 isn't that big of a deal. And the yield from it is quite worth the risk.
It just seems obvious and logical to me is all.

But your right. Most people, and I assume their situation would depend on this, aren't very good at measuring risk and reward.

>> No.5103444

>>5102393
But it was yours. You chose to give it up for a 50% shot at $100M.

>> No.5103443

>>5102374
it's infinite but it's countably infinite and since you appear to want to maximize your money you should be hitting the green button

>> No.5103453

I choose green, if I roll evens i win.

>> No.5103454

>>5103283
I maximize MY winnings by hitting the green button, everyone else can suck me for 100 grand cause ill have 100 mil motha fuckas

>> No.5103459

This isn't really science... But personally I'd hit the green button. I'm willing to take the risk for the reward. I love risks, though.

>> No.5103521

>>5103459

It is statistics though. 100 million at 50% chance is good odds. Flip a coin right now. If it is heads you win the money.

A better question is this.

I will give you a million dollars for every percent you put up.

So 100% chance you win 1 million.

99% chance you win 2 million.
98% chance you win 3 million.
97% chance you win 4 million.

and so on until

1% chance you win 100 million.

What percent would you choose now? It is very much risk vs. reward. I'd go with

$18 million or about 1/6 I lose and get nothing.

>> No.5103555

>make a secret deal with someone else doing the same thing. we both chose green, if one of us loses the winner (if there is one) gives the loser 1 million dollars.

>> No.5103574

>>5102266
On an average it's the sound choice. However, a guaranteed million will change your life.

Want to know what a million is? It's $8000 per month, every month, for ten years time. or $4000 per month for twenty years. Or more reasonably comparable to 40 years of $2000 per month: which is pretty much a life worth of upper-lower income working. And this is calculated just on a save-and-spend basis. Invest it in pretty much anything at all that pays dividends and you'll have an guratnteed source of $30k/year, forever.

It's a guaranteed lifechanger for pretty much everyone. a 50% chance for $100 can be a crushing disappointment.

>> No.5103593

No risk = no profit.

>> No.5103642

>>5103593
>No risk = no profit.
actually the set-up is no-risk 1,000,000 dollars profit.

>> No.5103745

>>5103574
But it won't completely trivialize your life, $2000 a month is not really all that much money at all, it's enough to live but it's certainly not enough to allow you to spend money on something you're interested in that isn't profitable and it's not enough to make sitting around doing nothing forever worthwhile. And also, there's inflation, you pretty much have to invest it in something that pays good dividends and reinvest most of the dividends or in 20 years that $2000 a month is gonna be worth $500 a month now which is absolutely not enough to live on. Basically, you are either going to be poor and mind-numbingly bored forever, or you are getting an amazing head start on life and still get to work for 20 years. Whereas $100 million, not even close, invest that in a good annuity and it's a six figure a year trust fund for the rest of your life, invest it properly and it's probably a trust fund for your kids' whole lives too, you can get coke and strippers every week and buy some muscle cars and a house with an indoor movie theater and spend a month a year in a luxury resort and still have guaranteed income for life, that's enough to enjoy doing nothing forever, and if you want to do something with your life you can fucking do it, you want to open a bar or something just spend a couple mil on it and it doesn't matter if it loses money forever, you can run it as long as you want.

What I'm saying is, $1 million and $100 million are so far apart that it's not a remotely reasonable tradeoff, $1 million is an upper middle class person's retirement fund, $100 million is upper class for life.

>> No.5103753

>>5103745
but it depends entirely on your situation. If you're 100,000 dollars in debt to the mob, that sure thing is better than a 50% chance of broken knees.

>> No.5103795

>>5103753
Yeah, if you're a pussy.

Gimme that green button baby!

>> No.5103842

>>5103753
well if you're 100,000 dollars in dept to the mob, you probably can't say no to a gamble.

>> No.5104196

>>5103745
Are you forgetting that there's a 50% chance that you won't get anything at all if you press the green button?