Would u risk 50 thousand dollars for a 6 to 1 chance at 2 million ?

Question

Would u risk 50 thousand dollars for a 6 to 1 chance at 2 million ?

Answer 1

If I were allowed to do it multiple times, then I would, because the law of averages would have it pay off (at 6:1) once per seven tries, and seven tries would only cost 350 grand and return 2000 grand!

If I were allowed to try only once, then no - simply because I don't have that money to spare, and it would wreck me to lose it, no matter what I could gain.

Answer 2

depends on how much I have.

if 50K is all I have, loosing it will hurt a lot, so I am not doing it.

If I have 10M  already, it is worth it - I won't notice a loss of 50K, but 2M will sure come handy.

Mathematically, this is described by taking expectation not of money themselves, but utility function of total wealth. Since I am risk averse, my utility function is concave, so you get the behavior I described above.

Answer 3

NO, the odds are not good enough.

Answer 4

Yes, but only if I had $50,000 that wasn't needed to pay other bills.

Answer 5

Absolutely. If I have the initial 50k.

Answer 6

Personally, no. From a mathematical point of view, I should because the expected value of the wager is 1/6*2000000 which is greater than the entry fee of 50000. But I think not ;)

Here's a question for you: If you are permitted to flip a fair coin until you get heads, then win 2^n dollars where n is the number of flips before you got your heads, what would be a fair entry fee to this game?

This is called the St. Petersburg paradox, and the mathematical answer is that you should pay any entry fee, no matter how large, for the opportunity to play this game.

Answer 7

If it was a straigtforward arrangement.  The money (both the 2,000,000 and the 50,000) was put into safeholding with a lawyer that I trust and tested for its authenticity.  I was allowed to bring my own six sided die to the "event" and would give the other party enough time to test it to determine that it was not tampered with.  And just to be sure, I was allowed to pick what number I was throwing for when the time came to make the throw.  And if I won, then my 50,000 was returned with the 2,000,000 so that the other party was not left with any satisfaction of knowing that they received anything from the bet.  But under these conditions, I believe the risk to be acceptable.

Answer 8

No, because luck never goes my way. So, no matter what the odds were I still would loose the 50K.

Answer 9

No! If I had $50,000.00 dollars I wouldn't need another dime the rest of my life!