Taking Chances

In the book Thinking Fast and Slow by Daniel Kahneman, he talked about an experiment where people are asked to choose between two options. I forgot the exact setting, but it was something like this: The first option is to receive 1000 dollar for sure. The second option is to receive 2000 dollar with 50% probability and 10 dollar with 50% probability. Most people choose the first option even though the expected value of the second option is higher. This is due to the people tend to be risk averse, and the gaurenteed money is more attractive than the uncertain money.

However, if instead of only allowing to choose once, people are given the choice to play multiple time, then most people will start to make the second choice for the higher expected value. Daniel Kahneman then raises the questions about how people make choices in real life scenarios.

For example, if we are given two job opportunities, one is a job with high security and stable income, where one can live comfortably for sure. The other is like a startup with high risk, with the possibility that one can lose the job in a couple of years, or this company might be the next Google or Apple and one can become millionaire.

Due to the risk averse nature, a lot of people (including me), will probalby choose the stable option. However, reflecting on the toy scenario in the book, even if we choose the risky option and fail, this is not a one-time done deal, in real life, we can also try again.

An argument against choosing the riskier option in real life might be, unlike the toy scenario, it is harder to calculate the expected values of various options. There are more variables to consider, such as family, locations, etc. True, if I were to be presented with these two options, I will still struggle to make a decision. However, after reading the book, I think I will lean towards the riskier option more compared to my former self. After all, it is true that we can always try again even if we fail.

Looking back to various choices I have made in my life, I did make various choices, some were safe, such as choosing the undergraduate university that I got accepted into, some were risky, such as choosing to do a PhD in Canada instead of US, or directly find a comfortable job. And believe it or not, I haven't regretted any of my choices so far, and I don't think this is because I always choose the right choices, even if I chose the alternatives, I believe I still won't regret them and be content with my life, because I did it my way, as the song says. However, I do wish that I will have the courage to make riskier choices from now on, and tackling more challenges instead of settling.

I am also being reminded of the book Determined, where the author argues the future is pretty much determined, maybe up to some quantum indeterminstic that we have no control over. To me, this is another motivation to take more chances, after all, these are not chances after all, just determinstic events that are bound to happen.

So here is a new resolution for me, do not be afraid of taking chances.

Questions or corrections? Reach me at zxieaa@gmail.com.