I think that pure research (research for its own sake) is a good thing. It is largely, but not exclusively, the domain of the academic world and helps move us forward, often in very unexpected ways. However, some of the stuff that comes off the roll really should be accompanied by a bullshit detector. At first glance, it would appear that the "research" you refer to in this thread qualifies admirably in this latter regard.
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Too scared to be a millionaire
- Thread starter Hulk Hoser
- Start date
Quote from Thunderdog:
I think that pure research (research for its own sake) is a good thing. It is largely, but not exclusively, the domain of the academic world and helps move us forward, often in very unexpected ways. However, some of the stuff that comes off the roll really should be accompanied by a bullshit detector. At first glance, it would appear that the "research" you refer to in this thread qualifies admirably in this latter regard.
Quite right! We don't have the original study to scrutinize so it's impossible to evaluate its validity.
Do you have any other insights or info to share on this? I am interested because I think I may suffer this malady. Before and in a trade I worry much more about what I may lose rather than what I may gain or the likelihood of success. I think this may be "capping" or limiting my success with trading!
Quote from Ripley:
A key thing is missing in this study. Would having $200,000 or $400,000 does really make a difference?
No it won't. $200,000 is still a LOT of money and the marginal utility of each increase in a $1 over that would be too low, that the rest of the $200,000 could be valued at around $20,000.
Thus, a better question would be, would you have $200,000 or $ 220,000 ?
It really doesn't make a difference.
Good point but, I would take it a step further and reach a different conclusion.
As one acquires wealth, most often one's marginal utility changes. For the vast majority of people that change takes time, and is not appreciated until it occurs, thus leading to 'irrational' decisions on the part of game contestants. (Well, is a decision irrational if it is unknowingly based on a false premise?)
For example:
Consider a rural farmer who's net worth hovers near $50,000 for 25 years. If he goes on 'Millionaire' and gets up $100,000 he recognizes how that 100k might change his life. He likely appreciates much less how the second 100k would be just as valuable. After getting up 100k he's likely thinking "I'd buy a car, a tractor, two more acres, and go to Hawaii. After that, who knows? And what more could a guy want?"
Now imagine one year later he has his car, tractor, acres, perhaps a couple new milking cows, and a nice Waikiki tan. Sitting in front of his TV with a brew what is he thinking?? "Shit!! I should have gone for another few Gs!"
This is the type of all-to-common error that professional speculators learn to avoid early on. Money is viewed as a point-keeping medium used in the course of business - and the emotional baggage associated with what money can do & buy is left at home, or wherever else it can be stowed.
Quote from Hulk Hoser:
Quite right! We don't have the original study to scrutinize so it's impossible to evaluate its validity.
Do you have any other insights or info to share on this? I am interested because I think I may suffer this malady. Before and in a trade I worry much more about what I may lose rather than what I may gain or the likelihood of success. I think this may be "capping" or limiting my success with trading!
This topic is old hat - much written about and studied in depth. Do some reading on Behavioral Finance and Risk Aversion. I would think you could find some good sources on the net.
I know it is covered quite well in the CFA program. Unfortunately my sources are hardcopy & that won't do you much good.
I Don't believe its too scared of becoming a millionaire, I truly believe some people have not calculated the risks to the exact decimal, if they did, they would know 1) they would lose this, 2) they would make this 3) 3x make - 2x lost = profit
I think most speculators have a general idea of the risks but not 100% clear, and that scares them, if they run it down to the last dollar, I believe it would help them overcome any kind of fear on putting on a huge position size.
One would only not place a large position because of fear, fear of the unknown or blurred.
I think most speculators have a general idea of the risks but not 100% clear, and that scares them, if they run it down to the last dollar, I believe it would help them overcome any kind of fear on putting on a huge position size.
One would only not place a large position because of fear, fear of the unknown or blurred.
Quote from newbunch:
I don't get it. The questions on Millionaire get harder as the game goes along. Most people stop because they feel they won't be able to answer the harder questions.
Good point. Some of us living overseas have never seen the damn show so wouldn't know that. My comments assumed a standard level of question difficulty.
That also seriously undermines the quality of the original article, which left out this important fact. The probabilities change for the worse as the game progresses. That is not how I, at least, read it.
I have more than a nodding personal acquaintance with this issue. As I understand it, anxiety can cause people to regress and think and behave in ways that do not really suit the circumstances at hand. Evidently, some people can deal with their fears and anxieties in a more constructive manner than others. However, everyone feels fear and anxiety, it is more a matter how you channel it. At least that is my understanding.Quote from Hulk Hoser:
Do you have any other insights or info to share on this?...Before and in a trade I worry much more about what I may lose rather than what I may gain or the likelihood of success. I think this may be "capping" or limiting my success with trading!
If you find this matter troubling, then you may wish to consult one or more of the many books on trader psychology to get a better understanding of this phenomenon if you are not familiar with it already. However, you may find the following items to be of some benefit in moving you along on your way:
http://www.amazon.com/exec/obidos/t...102-3025267-4616931?v=glance&s=books&n=507846
http://cdbaby.com/cd/gurgevich9?cdbaby=5ee7603c0df200c6d6c751be9b8489d2
Of course, all of this presupposes that you have a viable trading method that would make money if you properly followed it. Good luck.
I would think you (as the contestant) can probably answer the simple questions easily and work your way up until you no longer know the answer. Once you've hit a question where you have absolutely no clue and you've had to guess the answer -- and you've lucked out and survived -- that's the point to stop because the odds are against you winning by pure luck a second time on an even harder question (thus more likely you'll have to guess). I'd quit there and take my money. I'm not going to luck out and beat the odds more than once or twice. You don't want to push your luck past what's statistically likely. Kind of like Russian Roulette. You want to play it safe unless you're in a Vietnamese prison camp with Robert DeNiro and he's got a master plan (sorry, obligatory deer hunter reference there).
I'm certainly not a master gamesman though, so you may have ideas that haven't occurred to my feeble, atrophied brain. Post 'em if you've got 'em!
I'm certainly not a master gamesman though, so you may have ideas that haven't occurred to my feeble, atrophied brain. Post 'em if you've got 'em!