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How To Do Exactly the Right Thing at All Possible Times or

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  1. How To Do Exactly the Right Thing at All Possible Times or Nothing ____ ^ The Idea That Changed the World

  2. E(u | p, X) = xX p(x)u(x)

  3. E(u | p, X) = xX p(x)u(x) Expected Value = (Odds of Gain) X (Value of Gain)

  4. If it comes up heads I’ll give you $10. Should you pay $4 to play? Yes! Expected Value = (Odds of Gain) X (Value of Gain) 1/2 X$10 = $5

  5. Errors in Odds Errors in Value Expected Value = (Odds of Gain) X (Value of Gain)

  6. Errors in Odds Errors in Odds Errors in Value Expected Value = (Odds of Gain) X (Value of Gain)

  7. Errors in Odds Are there more dogs or pigs on leashes in Oxford?

  8. Errors in Odds Errors in Odds Are there more 4-letter English words with R in the 3rd or 1st place? _ _ R _R _ _ _ RING, RANG, RUNG... BARE, FORT, PARK...

  9. Errors in Odds Errors in Odds Cause       Estimate   Actual Tornado   564    90 Fireworks  160    6 Asthma   506    1886 Drowning   1684    7380 Per 200 million US residents per year

  10. Errors in Odds Errors in Odds Cause       Estimate   Actual Tornado   564    90 Fireworks  160    6 Asthma   506    1886 Drowning   1684    7380 Per 200 million US residents per year > > > >

  11. Errors in Odds Errors in Odds

  12. Errors in Odds Errors in Odds

  13. Errors in Odds Errors in Odds

  14. Errors in Odds Errors in Odds

  15. Errors in Odds Errors in Odds ? • 10 tickets • $1 to play • $20 if you win

  16. Errors in Odds Errors in Odds 1/10 X $20 = $2

  17. Errors in Odds Errors in Odds 1/10 X $20 = $2

  18. Errors in Value Errors in Odds Errors in Value Expected Value = (Odds of Gain) X (Value of Gain) Is this Big Mac worth $25?

  19. Errors in Value: Comparing with the Past COMPARING WITH the Past instead of the Possible

  20. Errors in Value: Comparing with the Past $150K $60K in Year 1 $50K in Year 2 $40K in Year 3 $135K $35K in Year 1 $45K in Year 2 $55K in Year 3

  21. Errors in Value: Comparing with the Past A $2000 Hawaiian vacation package is on sale for $1600. Would you buy it?

  22. Errors in Value: Comparing with the Past A $2000 Hawaiian vacation package is on sale for $700. You think it over for a week, and by the time you get to the ticket agency, the best fares are gone and the package will now cost you $1500. Would you buy it?

  23. Errors in Value: Comparing with the Past Yes $2000 $1600 No $2000 $700 $1500

  24. Errors in Value: Comparing with the Past You are on your way to the theatre. In your wallet you have a ticket for which you paid $20, and a $20 bill. When you arrive at the theatre you discover that you’ve somehow lost the ticket. Would you spend your remaining $20 on a ticket? No

  25. Errors in Value: Comparing with the Past You are on your way to the theatre. In your wallet you have two $20 bills. When you arrive at the theatre you discover that you’ve somehow lost one of the bills. Would you spend your remaining $20 on a ticket? Yes

  26. Errors in Value: Comparing with the Past The Lost Ticket The Lost Money X X

  27. Errors in Value COMPARING WITH the Past instead of the Possible COMPARING WITH the Possible instead of the Past

  28. Errors in Value: Comparing with the Possible

  29. Errors in Value: Comparing with the Possible $8.00 $27.00 $33.00

  30. Errors in Value: Comparing with the Possible $8.00 $27.00 $33.00 $51.00

  31. Errors in Value: Comparing with the Possible

  32. Errors in Value: Comparing with the Possible You want to buy a car stereo. The dealer near your house sells it for $200, but if you drive across town, you can get it for $100. Would you drive to get 50% off (saving $100)? Yes

  33. Errors in Value: Comparing with the Possible You want to buy a car with a stereo. The dealer near your house sells it for $31,000, but if you drive across town, you can get it for $30,900. Would you drive to get .003% off (saving $100)? No

  34. Errors in Value: Comparing with the Possible

  35. Errors in Value: Comparing with the Possible A B C D

  36. Errors in Value: Comparing with the Possible TODAY TOMORROW NEXT WEEK NEXT YEAR

  37. Errors in Value: Comparing with the Possible $60 NOW $50 NOW OR Problem #1

  38. Errors in Value: Comparing with the Possible • More is better than less  $60 NOW $50 NOW Problem #1

  39. Errors in Value: Comparing with the Possible $60 In 1 month $60 NOW OR Problem #2

  40. Errors in Value: Comparing with the Possible • Now is better than later  $60 In 1 month $60 NOW Problem #2

  41. Errors in Value: Comparing with the Possible Now is better than later More is better than less BUT $60 In 1 month $50 NOW OR Problem #3

  42. Errors in Value: Comparing with the Possible Now is better than later More is better than less  $60 In 1 month $50 NOW Impatience Problem #3

  43. Errors in Value: Comparing with the Possible Now is better than later More is better than less  $60 In 1 month $50 NOW Impatience $50 In 12 months $60 In 13 months OR

  44. Errors in Value: Comparing with the Possible Now is better than later More is better than less  $60 In 1 month $50 NOW Impatience  $50 In 12 months $60 In 13 months Patience

  45. Errors in Value: Comparing with the Possible Impatience Patience 30 Days 30 Days

  46. Errors in Value: Comparing with the Possible

  47. Errors in Value: Comparing with the Possible Illusions of Spatial Perspective As seen from  1 ft 21 ft 2000 ft 2021 ft

  48. Errors in Value: Comparing with the Possible Illusions of Spatial Perspective As seen from  1 ft 21 ft 2000 ft 2021 ft 20 Feet 20 Feet

  49. Errors in Value: Comparing with the Possible Illusions of Temporal Perspective As seen  from

  50. Errors in Value: Comparing with the Possible Illusions of Temporal Perspective As seen  from 30 Days 30 Days