EV Based Decision Making
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. ...