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The problem of points, also called the problem of division of the stakes, is a classical problem in probability theory.One of the famous problems that motivated the beginnings of modern probability theory in the 17th century, it led Blaise Pascal to the first explicit reasoning about what today is known as an expected value.
In fact, according to decision theory, the only value that matters in the above matrix is the +∞ (infinitely positive). Any matrix of the following type (where f 1, f 2, and f 3 are all negative or finite positive numbers) results in (B) as being the only rational decision. [4]
In most casino games, the expected value of any individual bet is negative, so the sum of many negative numbers will also always be negative. The martingale strategy fails even with unbounded stopping time, as long as there is a limit on earnings or on the bets (which is also true in practice). [4]
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An "instrumental rationalist" is a decision expert whose response to seeing a man engaged in slicing his toes [the man’s value rational fact-free end] with a blunt knife [the man’s instrumental value-free means] is to rush to advise him that he should use a sharper knife to better serve [instrumentally] his evident [value rational] objective.
The Potter Box uses four dimensions of moral analysis to help in situations where ethical dilemmas occur: Facts, Values, Principles, and Loyalties as described below. The Potter Box consists of a few simple steps, which can be completed in any order. You may also move between the steps several times before an adequate decision is made.
Singh said he owned an equity stake of around 6-7% in FTX. He said that made him a billionaire on paper during a boom in cryptocurrency prices during the COVID pandemic.
From this point of view, the St. Petersburg paradox teaches us that an expected gain that tends to infinity does not always imply the presence of a cognitive and non-random strategy. Consequently, from the decision-making point of view, we can create a hierarchy of values, in which knowledge turns out to be more important than expected gain.