[EM] RE : Re: Range voting, zero-info strategy simulation (raphfrk)

[raphfrk at netscape.net]

From: stepjak at yahoo.fr
 > --- raphfrk at netscape.net a écrit :
 > > A voter might be willing to use option C even though D gives a better
 > > expected value.
 >
 > In my opinion, if the voter prefers to vote option C than option D,
 > because he doesn't want to risk the -1 outcome, then he has not
 > correctly estimated that value as being -1.
 
 I guess it depends on how you define it. However, the example often given
 is which would you prefer?
 
 51% chance of getting $200
 100% chance of getting $100
 
 Risk aversion is a known economic effect.
 
 It only happens when you are talking about a major portion of a person's
 wealth.
 
 > Do feel this is a big problem? I have seen more concern that voters
 > will vote the opposite way: Commit to a favorite candidate and cut
 > off any chance of even electing the second favorite.
 
 No, I don't think this is a problem. In fact, having voters who
 don't vote in the extremes can help smooth out election results,
 so they don't jump between two very different results.
 
 I was trying to give a rationality for people not using maximally
 strategic votes.
 
 >
 > > The example given was:
 > >
 > > Assuming that you start with $1 and can place a bet on a fair coin. If
 > > you win, you get 1.05 times your stake (and your stake back). You get to
 > > repeat the gamble as often as you want, but can only use your initial
 > > stake and any money you win.
 > >
 > > What is the optimal amount to bet in order to maximise the rate of
 > > income. Clearly, if you bet all your money you will with near certainty
 > > be bankrupt after say, 10 rounds.
 >
 > I'm pretty sure you'd want to place a lot of very small bets. Do you
 > have the answer?
 >
 
 Yeah, you would try to max the log of the expected result.
 
 This works out at betting approx
 
 0.5*(1 - 1/(g))
 
 where g is the gain for winning (1.05)
 
 This works out in the example above of 0.0238 times your total.
 
 Betting anything higher than that gets exponentially more risky.
 
 
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