Tag Archive
Prediction Without Markets
In the 2008 Summer Olympics Usain Bolt ran 100 meters in 9.69 seconds, earning the gold medal and garnering the international attention that comes with being the "fastest man in the world." While Bolt became a household name, his competitors didn't fare nearly as well: far fewer people... »
Beating a Sunk Horse
Here are what I believe are fairly definitive answers to the sunk cost quiz questions. But of course feel free to take issue in the comments. SCENE: You have a non-refundable flight but now the opportunity to road trip with some friends to your destination has come up. Which of the following are rational... »
Hyper-Correcting for the Sunk-Cost Fallacy
Here's a classic litmus test for the sunk cost fallacy: You bought a ticket for a show. The night arrives and you just don't feel like going. Do you go anyway, so as not to have wasted the money on the ticket? Probably you shouldn't. Your current decisions should not be influenced by money that is... »
Throwing Money Away (Buying vs Renting)
I'm tired of hearing people explain that paying rent is throwing money away. Of course, they don't mean that literally. You're getting something for that money (a place to live). But with a mortgage you're building equity, right? Doesn't that fundamentally make more sense than renting? No. "Building equity" just means turning some of your... »