Adonis Diaries

Posts Tagged ‘expected value

Money is Not neutral, it is not naked and it is colorful

House-Money effect

Note: A re-edit of a post of 2014 “Money is not neutral, it is not naked and it is colorful”

Do you think money is just money?

Are cash money, checks, traveler checks, stocks, bonds… equivalent?

Is the money you saved from hard work equivalent in value from what you find in the street?

Is money inherited similar in value from hard work earning?

Which kind of money you tend to spend quickly, swiftly and on unnecessary items?

Does the emotional shroud adds value to money?

Does money earned in a lottery ticket change your decisions when compared to hard earned money?

Which kinds of money gives you this urge to take a postponed long vacation? Or to improve your property?

Suppose you won $1,000 on a roulette game and then lost it. How great is your regret and suffering? I guess it won’t last long compared to hard earned saving.

For the same expected value, which money you prefer: cash money, checks, traveler checks, stocks, bonds, inheritance, lottery…?

Here is an experiment:

Two groups are randomly selected. Group A is given $30 in cash and then asked to bet: You win $9 if head or lose $9 if tail in a coin toss.

Group B is not offered any money. The subjects are told that they will receive $30 or take part in a coin tossing. The subject win $39 if head or $21 if tail.

Which group felt incited to gamble? 70% of Group A gambled compare to 43% in group B. Why?

The expected value is the same, but group A got readily in hand $30?

Marketing strategists expect to benefit from your sheer exuberance by rewarding you with upfront cash money if you apply to their programs (credit cards, airlines, phone companies…).

Eventually, you’ll quickly spend the money and accrue exorbitant interest rates on your credit card.

Does the term “added value” is of purely a monetary connotation?

Do you think that investment in poorer countries for vast stretch of lands to grow monocultures that does Not benefit the people is of any added value? Like growing roses or cereals that do Not constitute the stipend of the people, after burning a deforesting forests?

Do you think investing in exploiting oil, gas, and minerals in poorer countries is of any added values for the people in poor countries?

Without proper control, weak governments, and not standards the people are left with totally degraded environment that nothing can live or be recovered, and health issues that decimate the living creatures and man.




March 2023

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