LessWrong (Curated & Popular) “the jackpot age” by thiccythot
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Jul 14, 2025 This discussion explores the paradox of risk-taking for wealth, using a coin flip game to illustrate how expectations can be misleading. It highlights the difference between arithmetic and geometric means, revealing why most participants end up with nothing. The conversation dives into cryptocurrency culture, addressing high-risk investment behaviors and the implications of rewarding a select few under capitalism. Finally, it critiques the destructive mentality surrounding wealth pursuit in trading, advocating for sustainable and purpose-driven financial practices.
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Jackpot Paradox Explained
- Positive expected value in repeated risky games can still lead to near-total loss due to multiplicative compounding.
- The geometric mean reveals a negative outcome where almost all players end up broke despite positive average gains.
Risk Preferences Fuel High-Stakes Losses
- Linear and exponential wealth preferences lead people to take extreme risks chasing rare jackpots.
- This mindset caused major losses for high-profile crypto figures like SBF and Three Arrows Capital.
Culture Worships Jackpots
- Society increasingly worships jackpots as wage growth lags and technology enables effortless speculation.
- This creates a culture valuing survival at zero and chasing low-odds jackpot outcomes.
