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handoflixue comments on Heuristics and Biases in Charity - Less Wrong
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http://lesswrong.com/lw/aid/heuristics_and_biases_in_charity/63gy - second half addresses specifically why "5p * 1/5" might be preferred to 1p. In short, "5p * 1/5" produces a bell curve instead of an "all or nothing" gambit.