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prase comments on How much to spend on a high-variance option? - Less Wrong Discussion

9 Post author: RolfAndreassen 03 January 2013 06:38PM

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Comment author: prase 04 January 2013 06:29:44PM 0 points [-]

Of course you are right, silly mistake.

(Not really important nitpick:) The dollar is spent once the ticket is bought and doesn't return even if you win, so you shoudn't have there (1-p(win)) * U(-$1), but just U(-$1).