Would you take the offer if it was only $10? I wouldn't (I get to tell the story either way), which suggests my decision really does depend upon my prior.
Another interefering factor is the fact that my utility function is nowhere near monotonic in dollars, especially for large amount. I'd take a certainty of $1 million over a 5% chance of $1 billion, which suggests that $50 billion is worth a lot less than a trillion times as much as 5 cents to me, so my prior must be some way below 99.9999999999%
Bear in mind overconfidence bias, its very easy to get trigger happy with 9s, and forget that even 99.9% is very impressive in a world with as many unknowns and interfering factors as ours.
If it were Warren Buffet? Probably. "Warren Buffet offered me $50 billion if my pen falls to the ceiling" is a much cooler story than "Warren Buffet offered me $10 if my pen falls to the ceiling," but the latter is still easily worth ten cents.
OTOH, "Some guy on the Internet offered me $10 if my pen falls to the ceiling" is not so cool a story. I probably would turn that down.
Agreed that utility is radically nonmonotonic in dollars.
Agreed that it's easy to get overconfident with 9s. It's also easy to anchor on the integers. ...
Today's post, Some Claims Are Just Too Extraordinary was originally published on 20 January 2007. A summary (taken from the LW wiki):
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