taking the sure 450 instead of flipping the coin for 1000
Assuming logarithmic utility, that’s the right thing to do if you have less than about 2000 to start from—and that’s without even considering the possibility that the person offering you the bet may have loaded the coin.
Assuming logarithmic utility, that’s the right thing to do if you have less than about 2000 to start from—and that’s without even considering the possibility that the person offering you the bet may have loaded the coin.