> For example, it might be okay to risk a $1 bet to win $1,000,000 if the probability is one in 500, but it is quite another thing for the average person to risk $50,000 to win $1,000,000 if the probability is one in 400. Even with better odds in the second case,
The author either made a typo (intended billion rather than million) or doesn't understand probability. The second case is on average going to lose you money. The expected return from getting $1,000,000 1 in 400 times is only $2,500. So betting $50,000 will on average lose you a lot of money.
The author either made a typo (intended billion rather than million) or doesn't understand probability. The second case is on average going to lose you money. The expected return from getting $1,000,000 1 in 400 times is only $2,500. So betting $50,000 will on average lose you a lot of money.