for people like me that don't want to take risk:

take 1 million
open a savings bank account that offers 1.2% annual rate
annual interest = $12,000
monthly interest = $1,000

combined with full-time job, or part-time job and studying. it would be nice.

(of course, there are banks that offer 1.4% savings account, such as canadian western. there are also better ways to enjoy the one million too, such as stocks/gic/bonds etc).

yeah but you're forgetting the part that 1 million would be (for most people), more money than you've ever had, and basically ALL your money. EVERY SINGLE PENNY.

it's not like you have 100 million in the bank.
sure if i had 100 million in the bank i'd give up 1 million for a 50/50 chance at 25 million.

but you have NOTHING in the bank. you're not a millionaire.

yeah it's a grand opportunity, if 1 million is chump change to you. Otherwise if you lose, you're left with nothing.

1) Take 50/50 chance for $25M
2) Sell 50/50 chance for $25M to someone rich for $5M
3) ???
4) Profit!

I have prety bad luck so I would just take the $1m. Sure $1M is not a lot of money but I don't have to risk of not having it. Besdie I am happy with any free money.

Beside I am not a greedy person $1m I can get a decent apartment a decent car and that's all i really need. I will still work where I am.

1 million is enough to make life more comfortable, but not make my dreams come true. It's worth the gamble.

:buttrock: pro

Whats your dream? :suspicious:

Owning a collection of expensive cars?

:fullofwin:

If I have an annual salary of $1mill , I see no reason to NOT take the gamble of 50/50 for $25-mill; it's as simple as that....It really depends on how much money you are already making....If I win 25-mill, I can retire 25 years early....If I lose, big deal, I'll work an extra year to make up that $1mill I just lost....

No, I don't find material possessions very fulfilling. If I were to win $25 million, I would probably buy a Jaguar XKE and would feign after an Aston Martin DB3 but that's all. The money would go entirely towards charity work, which $1 million would only be enough get things started but not maintain relatively indefinitely.

Some of you people must be horrible gamblers...it seems like no one understands how a coin flip works...

I'd do the $25m 50/50. $1m is a realistically attainable amount while $25m borders on what most of us will never, ever get to without extraordinary circumstances. I'd take that coin flip.

how about flip this question around.

a dude comes up to you, and puts a gun to your head.

he tells you, give up the 1 million bux in your hand now, and he'll let you go.

or flip a coin, if you win, he lets you go.
if you lose, you go to the bank and give him 25million (all your money).

which do you choose?

see how many of you change your answer.

mathematically, rationally, logically, the question is exactly the same.

I think most people working for someone will probably make plus/minus 2 million pre-tax in their life time (on a scale of 35 years working life @ 40-60k/yr). In this scenario you are basically guaranteed half your salary tax free. Of course with one less worry, you could spend the time thinking of how to turn that 1 into 25, because that's entirely possible.

True, but you would probably regretted if you lost to the coin flip? Wouldn't you? unless you are making crazy money.

If a person can already live a good life with or without the 1M or 25M, 25M would be chosen. Both 1M and 25M can change a person's life, in terms of how big of change, it differ, but whether just up to the person if he/she happy with one or the other.

Normally people would take 1M and run, but if you want more, gotta risk it, just like the game show, deal or no deal

^think of all the jerry cans you could buy for 1 million, you'd be in heaven.

Well, no, that doesn't really work because the condition of the person is different.

If I had $25m in the bank and some guy wanted to rob me for $1m, that's a no brainer because I still have $24m. No one in the right mind would rather take a chance where they could lose $25m rather than $1m.

But the other way around if you gave me $1m and said you could win $25m or NOTHING and the chance is 50/50, that seems like a good bet because I had 0 to begin with.

I'd take the 1mil easily without any remorse or thought :)

according to some people on this thread, it's not.

mathematically it is exactly the same.

but in reality is not.

usually when you can gain something, you always want more, but if you are going to lose something, you hope to be small

edit

and when you can gain to a point, that taking the risk is not needed then you just stop.

Those who choose 1M, for them is already worthwhile as regret you'll have to life with it for the rest of your life. Or you can be happy by making a safe choice with extra 1M in your bank account ontop of what you have already

This would be a fun comparison, you must choose one:

Option A:
Marry a decent looking wife who is medicore in bed.

Option B:
50/50 chance between:
A hot wife who is amazing in bed, know her ways around the kitchen, and take care of the kids.
Or
A fat ugly wife who steals your money, do drugs, and doesn't love you.

Option B would be incorrect because its suppose to be whether you have the hot wife or you don't

Unless the question states if you win the coin flip you gain 25M if you lose the coin flip you lose 25M

I'm with d87c, your example really doesn't make sense.

You're comparing between gaining 1MM or a 50/50 chance of gaining 25MM, versus losing 1MM or a 50/50 chance of losing 25MM.

Mathematically and logically, if you like, you choose the scenario which gives you the greatest expected return... Assume risk neutrality...

Case 1. Gain 1MM vs 25MM
Scenario 1: Expected Value = (1MM)*(1) = 1MM
Scenario 2: Expected Value = (0)*(0.5)+(25MM)*(0.5) = 12.5MM

Pick scenario 2 because it has the highest expected return.

Case 2. Lose 1MM vs 25MM
Scenario 1: Expected Value = -1MM
Scenario 2: Expected Value = -12.5MM

Pick scenario 1 because -1MM>-12.5MM.

In fact, you're supporting the argument of choosing Scenario 2 in the first case..

not necessarily... the remorse and regret of not taking the $1 million IN ADDITION to losing the 50/50 toss is equivalent to you being stuck with an ugly-ass wife

I would say, if changing the question to

coin flip to lose 1M vs 100% loss 25M

and now that's similar to gaining 1M and coin flip 25M

then again, people would always choose to lose 1M haha so you can't really flip the question around

You are assuming risk neutral behaviour.

It should be Utility[Expected Value] = Utility[Probably*Payout - Risk attitude]

How risk adverse you are is very hard to measure, but you can do it in a relative sense.

The regret isn't because you are stuck with ugly wife, didn't win the clip flip to have the hot wife, like you mention that's the regret/remorse.

But the regret/remorse from the actual question is regret for not taking the Ok wife which is the 1M Dollar

You feel remorse that you gave up the chance on having the 1M not from you didn't win the coin flip

ok

how about this

what if you were the one holding the gun.

lol. now we're back to question 1.
except the victim is offering you this choice. and you must honor the choice.

now i think most people would pick the 1million right?