-EV choice for less variance/sure thing
Today randomly had the 3 door, you pick one, announcer opens one of the other ones do you change or not discussion with gf. Afterwards she had been studying for a finance exam and came back to me with this question
Lottery 1- $10,000 1% chance you'll win
Lottery 2- $15,000 0.8% chance you'll win.
Lottery 1a- $10,000 100% chance you'll win
lobber 2a- $15,000 80% chance to win.
pick between 1 and 2, and then between 1a and 2a... did you pick the same number in both cases?
This changed to a discussion what about if it was $1,000,000 100% chance or $1,500,000 80% chance.
She was saying the richer you are the less likely you are to gamble, while I was arguing that the poorer you are the less likely you are to gamble. As for example in the lottery 1a/2a that $10,000 would mean more to some people who would likely not want the risk of nothing. Whereas the more rich (better of a bankroll) you have, the more likely you'd be willing to take the most +ev, because its not the end of the world if you end up with nothing.
I remember a thread i read awhile ago (possibly years) but after looking for a good couple hours can't find it. Curious as to where people draw the line when starting to choose the -ev choice and why.