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Legolan comments on 2012 Survey Results - Less Wrong
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Okay, now I'm confused. When I did this question, I remember I ignored C as being strictly dominated by B and pulled out a calculator. When I saw this question in the analysis, I did the same thing before scrolling down. Here's what I got:
Drug A saves you from 70 headaches at $350/yr, for a cost of $5 per averted headache. Drug B saves you from 50 headaches at a cost of $100/yr, for a cost of $2 per averted headache.
This seems to contradict your statement "Cost-benefit reasoning seems to favor Drug A". Drug A has a higher cost per prevented headache according to my calculations, which would make Drug B the better one. Am I failing at basic arithmetic, or misunderstanding the question, or what? Please help.
EDIT: I was solving the wrong problem, and a bunch of people showed me why. Thanks for the explanations! I'm glad I got to learn where I was wrong.
You're right about the cost per averted headache, but we aren't trying to minimize the cost per averted headache; otherwise we wouldn't use any drug. We're trying to maximize utility. Unless avoiding several hours of a migraine is worth less to you than $5 (which a basic calculation using minimum wage would indicate that it is not, even excluding the unpleasantness of migraines -- and as someone who gets migraines occasionally, I'd gladly pay a great deal more than $5 to avoid them), you should get Drug A.