December
10
Expected value = odds of gain x value of gain
Notes:
Expected value = odds of gain x value of gain
Why can’t estimate precisely:
- If something comes to your mind first, you will think that it’s more likely.
- Compare to the odds that other people get. You are less likely to do it if others are more likely to succeed, even if the odds to you is the same.
- Compare to the past instead of compare to possibilities.
- Comparison changes the value of things. But the comparison we make is different base on the current situation.
- More>less; sooner>later.
- Get to the future, change your mind.
The surprisingly logical mind of babies
- Generalization
- Causal reasoning
- Baby experiments
- Randomly sampled or cherry-picked
- Rich information from sparse data
Describe a time when you made a bad decision because you made one of the errors that Dan Gilbert discussed.
I decided to play games when I actually had to study. This is an error of time changing the expected value. The pleasure of playing games is “now”, and the bad consequences of not doing homework is “later”. Therefore, at the moment I value playing games over doing homework. Of cause I regret the decision later on when the pleasure of playing games becomes the past and the consequences of not doing homework become the present.