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Introduction
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Two voices
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- Do not fall behind.
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- Do not risk what you cannot recover.
- Events that make children hear the second voice too early are often a source of trauma.
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Ch 1 (unsorted)
- Check out [[Finite and Infinite Games]] by [[James P. Carse]]
- "Maximizing the expected returns of your choices is a good strategy only if the consequences of mistakes and misfortunes are reversible. Otherwise, it’s a stupid strategy."
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"it is not the best ones who succeed. It is the best ones of those who survive."
- In theory, performance determines success. In practice, performance is subordinate to survival.
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Coin toss
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Rules
- Heads = +$1,000
- Tails = -$950
- On average, you win $25 per bet, so you should play. But if you have less than ${{[[calc]]: ((950 * 2))}}, then you can’t plan a second round if you lose the first.
- Risk aversion makes sense in many non-ergodic systems
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Ch 1.8
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We instinctually know that survival matters, but envy can override this
- Envy often doesn make sense because we’re ignoring the parts of the person’s life we don’t like or are ignoring the slim chances that they could get where they did
- "Do not envy the survivors of ventures in which you didn’t participate."
- "Whenever we desire an outcome because we see those that benefited from it, it is good practice asking yourself, do you want the outcome, or do you want the opportunity to take the gamble that produced the outcome? If you only want the former but not the latter, you might be unprepared for what’s to come."
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Ch 1.9
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Summary so far:
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- The [[population outcome]] is the outcome of many people performing an action once. The [[lifetime outcome]] is the outcome of one person performing an action many times.
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- If the population and lifetime outcomes differ, the system that produces them is non-ergodic.
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- You can only rely on expected outcomes if you are guaranteed a large number of repetitions. Otherwise, they are misleading ([[the law of large numbers]] requires a large number of repetitions).
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- Risk aversion is rational in the presence of non-ergodicity.
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Ch 2
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2.1
- Italian healthcare system worked on average, but failed locally in regions that were hardest hit
- Average hides what happens locally. Inidviduals only care what happens locally.
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Most arguments between two good-faith people stem from two things
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- Optimizing for different metrics
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- Considering marginal utility of a resource with nonlinear utility (e.g. $100 has higher utility to someone below the poverty line than to a millionaire)
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