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shminux comments on Is risk aversion really irrational ? - Less Wrong
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Nice stories, and this is my YAPS (yet another post summary): Risk aversion is rational when the (fully recursed) downside is unbounded. When your downside is bounded (you can evaluate the expected utility of a risky decision with high accuracy (how high is high enough?)), the rational choice is the one with the highest expected utility.
If considered this way, I definitely agree. As others said, in real life the fully-factored downside is hard to evaluate, and it tends to increase out of proportion with the first-order risk. Of course, the same happens to the upside, but the inability to calculate the fully-factored expected utility is a very rational reason to avoid risks.
Missing the point - Clippy's downside wasn't unbounded. It was just larger because of lack of information.
Please tell me what the bound was, then.
0, at 0 paperclips. It's only 1 utilon worse than having 1 paperclip, which is in turn 1 utilon worse than having 4.