The chart below shows the expected financial returns of a Russian Roulette gambler playing it multiple times.
There is no high-enough prize (nor low-enough cost) that make Russian Roulette worth it over time.
(thread, 1/N)
2/ Of course, there are reasons for which one would want to play Russian Roulette once.
But Russian Roulette cannot be a long-term strategy.
And it's not about cost-benefits.
3/ In a previous thread posted today, I compared GMOs to Russian Roulette.
Both come with a risk of ruin, and therefore none can become a strategy.
4/ I later deleted that thread, because I didn't want to give the wrong impression that "$0 payout" and "death of the ecosystem" are the same thing.
They are not, and I did not intend suggest that.
5/ What I wanted to show, is that one cannot take a single-gamble cost-benefit analysis and extend it to a repeated set of gambles.
This is a well-known phenomenon, but I found the RR chart to pass the point very well.
6/ This is because it is my impression that we are able to acknowledge that "repeated exposure to ruin means inevitable death"
but still, in our brain, it doesn't cancel the visceral thought that "the benefits might be worth the risk".
7/ I found this chart very good at passing the point that not only the worst-case scenario is bad, but that any realistic good-case scenarios are bad too.
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A problem of many organizations is that they are aware of the needs of employees (impact, recognition, growth, fair salary, etc) but fulfill them as they would with a checklist: let's do this superficially, checked, done.
Some examples (& solutions) ↓
1/8
Example #1: recognition.
Many companies and managers know that employees want recognition.
But they fulfill this need in a very superficial way. With a small internal award, a certificate, etc. Top red flag: it's HR-driven and/or feels cringe.
2/8
The alternative:
– make it personal: it should come from the boss or the boss' boss.
– make it congruent: a moment of recognition followed by a year of no recognition feels (and likely is) fake.
3/8
Whenever we desire an outcome but not the actions that would make us achieve it, we end up with inaction, busywork, shortcuts, excuses, and, ultimately, frustration.
(a thread of highlights from the first chapter of my book "The Control Heuristic")
1/14
You probably do not have a decision-making problem, but an action-taking one
2/14
Decision-making is not the same as action-taking.
The cortex is mostly responsible for taking decisions, and the ~basal ganglia determines whether we act on our decisions.
The recent wealth tax increase in Norway was expected to bring an additional $146M in yearly tax revenue
Instead, an estimated $54B-worth of ultra-rich left the country, leading to a lost $594M in yearly wealth tax revenue
A net decrease of $448M+
(sources and calculations ↓)
The Guardian estimates the wealth of the relocated millionaires at 600B NOK, or $54B. That would have been taxed at 1.1%, which means $594M in wealth tax lost
Norway raised NOK 16.1B = $1.46B in wealth taxes in 2019 (page 3 of the PDF below); increasing the wealth tax from 1% to… twitter.com/i/web/status/1…
Plenty of replies who seem to think that leaving the country to keep one’s money is greed, but implementing a wealth tax to get someone else’s money isn’t