S E47: Making Decisions in an Uncertain World
Think Like An Economist
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The Risk Reward Trade Off in a Fair Bet
A risk overs person doesn't accept fair bets because a fair bet just takes that current level of wealth and adds uncertainty to it. Of course, we want to minimize risks, but we don't want to eliminate risks. We need to think about costs and benefits so that we take risks only when they're worth it. That's why it's worth taking calculated risks - the risk reward trade off.
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