Smaller sums are more likely to convey probabilities of each party accurately. For example, if Elon Musk offers me $5000 to split between two possible outcomes, I will allocate them close to my beliefs, but if he offers me 5mil, I’ll allocate about 2.5mil each because either one is a transformative amount of money.
People are more likely to be rational with their marginal dollar because of pricing in the value of staying solvent. The first 100k in my bank account IS worth more than the second, and so the saying, a non-marginal bird in the hand is worth two in the bush.
Smaller sums are more likely to convey probabilities of each party accurately. For example, if Elon Musk offers me $5000 to split between two possible outcomes, I will allocate them close to my beliefs, but if he offers me 5mil, I’ll allocate about 2.5mil each because either one is a transformative amount of money.
People are more likely to be rational with their marginal dollar because of pricing in the value of staying solvent. The first 100k in my bank account IS worth more than the second, and so the saying, a non-marginal bird in the hand is worth two in the bush.