STOP Making the Really
You made one good decision and one bad decision!
The first bet you made you had a 60% chance of winning. Betting on heads was the ONLY decision you possibly could have made if you were thinking clearly.
In the second bet you only had a 40% chance of winning the same amount of money as you were betting. This is a terrible decision.
Just because you lost both bets doesn't mean you mean you made two bad decisions. You made one very good decision that turned out poorly and one very bad decision that also turned out poorly.
KEY POINT: Decisions aren't judged on the result that you get from making the decision. It's a good or bad decision based upon the information you have at the time.
Bad luck happened.
It so often does.
And in this case you got a crummy outcome... but you made the RIGHT decision.
All Olympians, Professional Sports Coaches, Master Chess Players, Millionaires who remain millionaires...they all get this concept. And that's about it.
KEY POINT: You must determine what the chances of each outcome are in deciding what to do and all other things being equal, do that which has the best possibility AND value of happening.
Human nature, however, causes us to make bad decisions in the future about similar situations.
But a good decision is not just the decision that has the greatest chance of a positive outcome...because all other things are not always equal!!!
The next thing to think about is the VALUE of each result in a decision.
In either scenario, had your friend been willing to give you $20 if you win and you give him $10 if you lose...mathematically it still would have been
best to bet on heads in both cases but in either case it would have been good to bet heads OR tails as long as your friend is giving up $20 to your $10.
The Value of a decision is figured out by simply taking the possible outcomes and figuring the chances of each of those outcomes and then factoring in the value of each option.
Imagine you have one normal dice on your left. Six sides on a dice (die). 1,2,3,4,5,6.
If you roll a 1 or 2 you lose $100
If you roll a 3,4,5 you win $50
If you roll a 6 you win $1000
Write that information down.
You see another dice on your right.
On this dice, if you roll a 1 you lose $50
If you roll anything else (2,3,4,5,6) you win $100
You get ONE roll of ONE dice.
Which dice should you roll?
Find out if you are right!
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