Jonnan comments on Allais Hack -- Transform Your Decisions! - Less Wrong

18 Post author: MBlume 03 May 2009 10:37PM

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Comment author: Jonnan 05 May 2009 02:13:06AM *  2 points [-]

Looking at the original 'Allais Paradox' post - under what theorem is the reduction of uncertainty by 100% equivalent to the reduction of uncertainty by 1/67th?

It takes energy to plan ahead - the energy required to plan ahead with 100% certainty of outcome is considerably more than the energy required to plan ahead with 99% certainty. But there's no such difference in energy consumption planning between the possibilities inherent in 67% and 66% - those are functionally equivalent.

So, um, why is this result even slightly surprising?

Edit: - Now, what would be interesting would be the question of the decisions made if the options are $24K with 94% probability to $27K with 93% probability, and variants thereof where the reduction in uncertainty exactly balances out the increase in value.