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0 pointscloutchaser3y ago0 comments

It also ignores another big factor if psychology, humans are a lot more afraid of losing what they have than gaining anything.

So even in this stupid simulation, it just doesn’t work, as people get wealthier they actually risk less.

This whole article is Marxist academic bullshit, eaten up by Marxist upper class tech 20 year olds in this thread.

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AnimalMuppet3y ago

> It also ignores another big factor if psychology, humans are a lot more afraid of losing what they have than gaining anything.

Rightly, I think. The marginal utility of the next dollar is higher when you have fewer dollars. (I think of it as roughly a 1/x curve, but I have no solid data for this.) This means that, if I bet 50% of my available money on a 50/50 chance, I will lose more utility with a loss than I will gain with a win.

But the more I have, the flatter the curve out where I am. So the richer I am, the more I can make that 50/50 bet, not just because I can take the loss better, but also because in terms of my personal utility, the rewards and losses are more evenly balanced.

Also note that if you have a 20% loss, it takes a 25% gain (on what you have left) to bring you back to even.

cloutchaserOP3y ago

This is just not how it works on the psychological level. Mathematically yes, but we are not machines.

Someone with a net worth of $1bn is not going to brazenly bet $500m because hey, who cares it’s only half my net worth. That’s ridiculous.

Just like this entire post and discussion. It’s a frustrated poor intellectuals self explanation for why they are unsuccessful.

It’s also the line of thinking that when taken to the extreme killed around 130m people in the 20th century.

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