Expected values (EVs) are hard to wrap your head around. There’s a famous Veritasium video where he asks people whether they would bet $10$ dollars to get some $X$ dollars, where $X$ is slowly increased from $10$ onwards. It’s interesting to see that even when he offers $X=30$, when the EV is $+10$, people still decline. This phenomenon is called loss aversion, where we tend to weight our losses on average twice as much as our gains.
I think I’ve gone my entire life doing this until quite recently. I remember in high school whenever I got a good grade, it felt moreso as relief rather than happiness. When I got a bad grade, I was crushed. I wanted to avoid this so badly that I did everything I could to make sure I always got a good mark - even if it was not optimal from a pure time and effort to reward ratio. Scaling up, now it’s with university and general career things. I’ve realised I don’t value my wins as much as my losses, and recent losses definitely feel 2-3 times worse than my recent wins - which fits in well with the whole idea of loss aversion and why I want to avoid them.
However, this is really problematic! You might pass up on opportunities that are high EV but have non-neglible downside risk which is then weighted unequally. To get around this, I’ve started looking at things I do in terms of EV, and also doing things that are high variance to try and get around this problem. Making a ton of high variance plays, over and over, I’m beginning to realise you can slowly get past the problem of weighting the downside risk highly. Even in the worst case if you go, say 0/100, in terms of wins and losses - it’s still fine! The process of going through and taking high variance plays, as well as actually evaluating them with a good, unbiased EV has a lot of upside in the long run.
I’ve felt this has been the case personally - I’m able to better regulate my feelings as well as my decision making process by not just only focusing on the losses, and looking at everything I’ve done as a distribution instead of independent events. So, what are the key takeaways? Fill your life with high variance plays and seek out upside risk! Do things you think can go really well and evaluate them based on an unbiased EV that will you give a path to your best case scenario.