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by cromd 1383 days ago
Well, life doesn’t always give many chances to play a game. You can only work at so many failed startups, or have so many failed long-term romantic relationships before you’ve used your best years! Someone else already made the point about the risk of walking away empty handed, but I’m just pointing out that some domains allow for many retries and some don’t.
2 comments
bluetomcat 1383 days ago
This represents the trap of over-rationalisation which is so prevalent in the Western world. You cannot devise universal rational guidelines suitable for every situation and every subjective experience. There is a multitude of various different factors involved in every particular situation. The lean and precise rational model breaks badly simply because it doesn’t (and can’t) account for all the factors.
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BeetleB 1383 days ago
> Well, life doesn’t always give many chances to play a game.

Disagree. Sure - you don't get many games involving millions of dollars, but you do get many for smaller amounts.

I could put all my extra money into paying off a low interest mortgage (guaranteed return), or I could put it in an index fund (higher average return, with no guarantees, and a potential for a loss).

And working at startups: Not sure the expected value is high there. May be higher than working at a FAANG. I doubt it.

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cromd 1383 days ago
I assume you agree that some kinds of opportunities are limited. Not trying new foods because you're afraid of wasting your money would be silly, or not saying hi to your neighbor because they might ignore you would be silly, but some things are very complicated. I'm thinking of: surgeries, mate selection, college degrees, white-collar crime, etc. I'm just saying that utility and loss aversion come into play, and "life is long" can't always save the day.

On startups, I think there are people who have been in situations where they have an expected value greater than something like a FAANG $300k/year over 3 years scenario (e.g. they own a large stake in a close-to-IPO company). And they should maybe still walk away, if the 50% chance of a tiny IPO payout would destroy their self esteem and make them feel even further behind their high-salary peers. (Also keep in mind that not everyone lands jobs at FAANG companies, so it shouldn't be super hard to find people who lucked into a startup where their EV is higher than their market salary over a few years). In other words: even if a startup somehow has higher EV, you may want to ignore the EV.

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