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Bryan Caplan  
PERMANENT LINK | OCTOBER 9, 2008

Bet Update

Bryan Caplan
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See Blindness... Why Do People Keep Calling Tyl...
It looks like I have two takers in the comments: Michael K and Steve Roth.  To seal the deal, I just need you guys to email me and give me enough info so I can identify you "in real life" when it's time to settle up.

I'm also happy to bet Arnold - if he sticks with his probabilities (90% chance of small gain, 10% of enormous loss), he should, because this bet has a binary payoff.  Arnold?

Andy Kessler has not responded to my post or email.  The charitable explanations are that he's too famous to notice my offer, or too rich to find a $100 bet interesting.  Want to help change his mind? (email address from andykessler.com)

P.S. The bets from Steve Roth and Michael Kayatta have been confirmed.


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CATEGORIES: Finance: stocks, options, etc.
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COMMENTS (4 to date)
Michael Kolczynski writes:

Arnold keeps beating the mathematical expectation drum, even though you're betting even money on a positive or negative. I don't get it.

Posted October 9, 2008 6:56 AM
Grant writes:

Wait a sec... Arnold says something to the effect of:

Put $100 down and roll a d10. On a 1, loose all your money. On a 2 through 10, gain $5.

I wouldn't take that bet. Am I missing something here?

Posted October 9, 2008 9:10 AM
Grant writes:

Eh, never mind, hadn't had my coffee yet...

Posted October 9, 2008 9:38 AM
michael e sullivan writes:

Even though I agree with your position in general (that the bailout is much likely more likely to lose money than gain), I'm on the fence about taking your bet as I think the opportunities for the CBO to declare a gain despite there being a significant loss in real terms that account for all costs are very wide.

If arnold thinks most of the losses happen in a 10% extreme scenario, I don't understand why he wouldn't take your bet.

Posted October 9, 2008 12:32 PM
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