People Still Buy Lottery Tickets Even Though They Know

By Kari Foster

I suddenly discovered, is more than just a simple calculation exercise. This method forced me to reconsider the meaning of everything in life and realize that my previous way of looking at things was unreasonable. A disaster with a small probability is equal to a little bit of bad luck with a large probability. A little chance of becoming a bill

• Language: English
• Publisher: Kari Foster
• Release date: May 5, 2024
• ISBN: 9798869360649

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People Still Buy Lottery Tickets Even Though They Know

People Still Buy Lottery Tickets Even Though They Know

Copyright © 2023 by Kari Foster

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : CALCULATING THE PROBABILITY OF PROBLEMS

CHAPTER 2 : STICK WITH A NORMAL JOB

CHAPTER 3 : INCENTIVES REDUCE COOPERATION

CHAPTER 4 : SINCERELY INTRODUCE TO READERS

CHAPTER 5 : IF YOU ANSWERED YES TO

CHAPTER 1 : CALCULATING THE PROBABILITY OF PROBLEMS

I suddenly discovered, is more than just a simple calculation exercise. This method forced me to reconsider the meaning of everything in life and realize that my previous way of looking at things was unreasonable. A disaster with a small probability is equal to a little bit of bad luck with a large probability. A little chance of becoming a billionaire is equivalent to a lot of chances of becoming someone who lives relatively well. That's exactly how a stock trader sees things, and this perspective explains a lot of things. So why doesn't the whole world think this way?

It does, Annetter told me, but the reason that thinking doesn't work is because perceived risk and real risk are very different. You know, nothing is bad until it actually happens. Just like in relationships, when you imagine having to break up with someone else and it actually happens, the reality is always 10 times worse than the imagination. You would have to be really cold and steely to be able to accurately predict probabilities and consequences.

Human psychology is part of the reason. People still buy lottery tickets even though they know the odds of winning are not high. Just like when investing in things that have a very low probability of success, those are all useless actions. But if you do it to bring some light to the gloomy days with the faint hope of being able to escape the deadlocked, no-way-out situation that is your daily tasks, then this will also help. that's it. Trying to determine the worst possible outcomes of life, no matter how plausible, is no fun. Therefore, we often tend to avoid doing it, or pay a lot of money for insurance services. After all, profits from the insurance business mainly stem from the difference between the ability to assess and price risks between customers and insurance service providers. I found that if I could apply any financial concept that I had to a real grasp of non-financial situations, the subject of dynamic markets would become much easier to understand.

During the first half of the course, every week we were paired with another student and had to meet with that person before class on the second day to practice applying a trading strategy in the virtual market. At times, we have to explore the value of information in hypothetical efficient markets; Then we must consider price and liquidity. We apply matrix algebra to create an investment portfolio of stocks priced to minimize risk and optimize returns. Luckily, I was paired with Ottavio twice. Ottavio is a very intelligent Brazilian. He was a businessman before coming to this school and had no other desire than to work for a hedge fund after graduating. He gave me nothing to do but praise the business models he had set up in Excel and watch while he ran them.

During the second half of the course, we were free to choose our partners. I know Ottavio wants to collaborate with his Brazilian friend Rubens. I also understand that if I want to pass this subject, I must find a very good partner. As soon as Coval said, Choose your own partner, I immediately sent an email to Chad, a finance student in block A. Chad: You have to become my partner. Otherwise I will strangle you to death. Really. I turned back to look and saw him with puffy eyes, covering his mouth with his hand to suppress the laughter in the classroom. He bent down and nodded. In the room, I also saw another male student in my dormitory banging his hand on the table. He also sent a letter to Chad at the same time as me. But he was slow. I quickly grabbed the gold.

Each team is assigned to manage a virtual amount of $1 million with requirements such as naming the team, designing an advertisement, and a price list. Chad and I named our team Alchemy and committed to our clients to turn every investment into gold. There was a team that chose the name Destroy the whole house, in fact, in one class, they borrowed so much that they destroyed the entire computer system in the classroom, forcing Professor Coval and Stafford to change the rules of the game. . As I expected, Chad programmed a super professional spreadsheet, with options calculations and formulas at a glance. Chad tried to explain to me why we had to protect delta variables or profit from gamma variables in the next class, but I was an idiot who could only enter existing data, trading in series of numbers. appeared on Chad's spreadsheet. Doing business on computers is weird. If this exercise turns out to be true, then behind the flashing numbers on the screen, the ever-changing charts and constantly fluctuating prices, are communities of people, factories and towns. There will be mothers who take their children to school

and then go to work, relying on the company to support their families. But we can only buy and sell assets that those people need to live, because prices change by a percentage of the unit. Business is like taking a step beyond the factory floor and the assembly plant, a process that appeals to HBS's brightest minds because the profits to be made are huge. But one must have complete faith in capitalism, must believe that trading in this way will help in the efficient allocation of social resources. Because there is no clear evidence that what you do is aimed at any goal other than benefiting sellers and customers. One could argue that business is an effective pricing mechanism and that this mechanism affects every individual in the economy. But do traders really deserve the money they earn? I see the growing number of investors in hedge funds as more of a market failure than a fair distribution of profits in society. Studying dynamic markets with many smart classmates who are focused on constantly changing figures and spreadsheets, I feel like money has the ability to deceive honest labor, effort is not worth it. equally divided in an efficient market.

Over the next five weeks, Chad and I's scores rose to the top of the class. Usually, when Chad's computer shuts down, I just try to trade a little longer, pushing up the price of a stock or bond to make a little more money. This increases our revenue. In the last class, we had a chance to rise to the top of the rankings after the Brazilian guys lost most of their money due to not being able to close the transaction in time. But we couldn't catch up with the winning couple, an American guy and a German woman. Anyway, I easily passed this subject. Chad says this is proof that markets can fail. I think this is my highest priced speculative market at Harvard.

In 1998, the school applied a policy forcing employers not to include scores in student admission standards. At that time, there were two annual business administration classes, one starting in September and the other starting in January. The number of students in a class can vary, and it seems unfair to expect students in difficult classes to have the same scores as students in easy classes. But since two classes are merged into one, this policy needs to be reconsidered. Employers want to know students' scores, and the school's alumni have had to submit their transcripts, arguing that the policy of not disclosing scores will undermine Harvard's academic standards. At the end of November, we received a letter from professor Rich Ruback, explaining the school leadership's position. He wrote: After consideration, we realized that the policy of not disclosing scores is not consistent with the mission of developing outstanding leaders. It is the responsibility of leaders to identify, evaluate and seek ways to improve company performance. Therefore, HBS has considered and chosen the policy of publishing student scores starting in 2008. The Student Union President justified in the school's Harvard Crimson magazine that the teachers on the school's leadership team had too worried because they believe that motivation and academic rigor in general are gradually disappearing and people are overvaluing social activities, relationships and extracurricular activities at the expense of disregard the acquisition of management skills in general. Professor Ruback responded: We want to ensure that we always create conditions for students, helping students make the most of their time studying at Harvard. We also believe that students also achieve a certain level of grades, so it is fairer if students can take advantage of them to demonstrate their research abilities.

My personal social, extracurricular, and relationship activities have also expanded since freshman year, including playing indoor tennis every two weeks with Oleg, a Russian student in my house. Oleg looks a lot like former Russian President Boris Yeltsin in his youth, with his always smiling face and thick blond hair. When he was a child, Oleg lived in New York. Because his father was a diplomat of the former Soviet bloc, he spoke English quite fluently and well. His slow gait when entering the football field can easily fool others. He is a fast and strong athlete. After every football game, we talk about Harvard.

One afternoon, Oleg grimaced and said: I don't understand why they think we don't study hard. Before that, I had never worked so hard. I study and then go home. I don't dare go to the nightclubs in Boston on Monday. I wish I had time to make friends.

The policy of publicizing scores helps relieve students' frustration about school culture, and it has turned into a referendum on the school's educational purpose and motto. Our student research group disbanded after the first year, but I still regularly met Stephen, a former diplomat, who was extremely angry about this issue. How can we have a comfortable learning environment when students always have to worry about grades? Do you remember accounting? We feel confused. But we are compared to a bunch of students who are former bankers and consultants, who can take exams and fall asleep at the same time. Ridiculous. Then look at how people deliberately impose this mechanism on students. Haven't they read about consensus building in the Leadership and Development (LEAD) case studies?

But this doesn't affect us, I replied, we're still safe.

That's not the problem, Stephen said in an angry voice. The problem is that students are not respected. Only the opinions of employers and school alumni matter because they are the ones paying.

On this point, I agree with Stephen. Scores only help me know my level, especially with specialized subjects. But my scores in leadership and development skills, dynamic markets, and basic subjects like macroeconomics, leadership, and corporate responsibility didn't matter. They do not reflect whether I am a good businessman.

The policy of publicizing scores forced us to reconsider our purpose in studying at business school. A veteran reporter for the Financial Times once told me that the real secret to making money is to want to make money. It's not about wanting to make a little extra money. In fact, he became rich by marrying a European wife with a huge dowry and ended his career by building a large house overlooking the Mediterranean coast. But what he means is that success in business or any field requires great motivation. His evidence is a series of examples of extremely wealthy people, from Mafia bosses to computer programming PhDs at Stanford, from people selling vegetable trimming tools on TV shows. next evening quantitative geniuses specialize in trading in financial markets using derivatives. People with little education can do much better than those with many degrees. From this perspective, business is completely different from law or medicine, forcing students to know every detail. At most levels of education, business is just a basic pursuit, requiring qualities such as grit, acumen, leadership and judgment. Finally, there are frameworks, spreadsheets, and academic documents. Those are just a few sporadic things in the beginning, behind it there is a whole epic drama. Therefore, many people have said that business is something that cannot be taught, it can only be experienced and learned.

In the book What Harvard Doesn't Teach You, athletics manager Mark McCormack wrote: To be fair, what they don't teach you at HBS is what they can't teach you, which is how to read. human thoughts and how to apply that knowledge to get what you want. He said, early in his career, he made the mistake of hiring Harvard MBAs, because he thought they had enough confidence and expertise and could solve many problems. But in reality, he discovered that they were silly naive people or victims of university training. As a result, they have lost the ability to learn from real life, do not understand other people's thoughts, or do not know how to synthesize situations and are very good at giving wrong opinions. McCormark concluded that a diploma cannot guarantee entrepreneurial talent.

McCormack was not the only one to make comments attacking Harvard MBAs. During the summer break between two years of school, I had the opportunity to talk for an hour with someone who worked for an investment bank in Boston. He compared HBS to Cambridge Community College and was extremely interested. Every week a famous businessman comes to HBS and says that the school's MBAs are great but they should talk less and do more. Schools need to train more experts who are capable of solving problems rather than lying experts.

In early December, Mr. Ruback attended a student debate on the issue of publicizing scores. The viewpoint supporting the above idea emphasizes the need to direct students to focus on studying and requires the application of policies that have proven quite effective in the first nine years of the school's establishment. The opposing view is that the above idea will discourage students from taking risks for academic purposes like my choice of dynamic markets subject and reduce the importance of extracurricular activities. This policy is also unfair to students from non-English speaking countries because it places too much emphasis on attendance; for students who do not have a background in school knowledge, because everything is completely new; and for students who want to change careers, because they will not be able to hide their low finance scores when trying to find another job like banking. The student finally made the point that if HBS recognizes students based on outstanding achievements and leadership abilities, why is it now tying them to a limited curve, evaluating them solely based on academics? art?

The vote ended with a vote of 44/6, publicly protesting the score. But ultimately this means nothing. The board of administrators decided to implement the policy anyway, and the dean wrote a letter saying: HBS's reputation is rooted in the continually evolving experiences we provide students in every classroom, every experience Much depends on maintaining academic standards. The policy of not making scores publicly available falls short of our commitment to those standards.

The above experience reminds me of a story Mr. Ruback told during the first week of class about a student who was angry when he heard that he was not a customer but just a product of HBS. But I realized that no matter how much I loved HBS, I was too old to adapt to the school's culture. To work, I don't need any extra motivation. My motivation is that I quit my job and am in debt like hell. Once I was out of the woods, I was no longer concerned that my grades would reflect what I was learning. I know what I'm learning, and that's more than enough. When I learned that the school was considering accepting more new graduates and limiting students over the age of 30, I understood that the school wanted to create a more controlled environment and only wanted to recruit students who could train them. I can create, but I don't understand why the school doesn't mention recruiting more experienced students. What would these discussions look like if half the students in the class were in their twenties and had no work experience?

During my time at school, I met Bob, my desk mate during the first semester, quite often. All my initial fears about him were completely gone. Behind the cold exterior of a US Air Force soldier is a