Weighting attributes is a great decision-making tool, and is extremely simple: how important is this attribute? Give it a weighting e.g. 1-5, 5 being most important. Add attributes. More are not always better. Base decision on number of 5s, pro and con. e.z.

]]>That should tell you how much we love this game! Looking forward to checking out the links today.

]]>“The return you get from an investment isn’t always represented in dollars and cents.”

:)

]]>What I suspect you, and the article you link to, mean, is that one shouldn’t let low chances of success rule out attempting a particular action. This is a laudable and sensible maxim, but only when you consider what the payoff of your low-odds action is when you succeed.

For example, the linked article claims that “Eighty percent of restaurants fail within two years.” Let’s say that you want to start a restaurant, and, for the sake of simplicity, let’s accept this 80% statistic as your odds of success. There is an 80% chance that your restaurant will fail in the first two years, and a 20% chance that it will still be running successfully (again for the sake of simplicity, let’s assume that if it lasts two years, it is a success, and that this is your positive outcome).

Should that 80% chance of failure rule out starting a restaurant? Absolutely not, but it should absolutely inform your choice, and provide a helpful framework to calculate whether or not starting a restaurant is likely to provide a positive return on the resources you put into the project (to use a little gambling lingo, it should enable you to work out if starting a restaurant has a “positive expectation”, or +EV for short. A “positive expectation” means that the benefits outweigh the costs once you have adjusted for the odds of each outcome).

So, you’d work out the dollar value of the money needed to start the restaurant. Then you’d factor in the dollar value of the time you would commit, the mental exertion and stress of running your own business, etc. etc. until you had totaled up the cost of every resource you would have to commit. You pay 100% of these costs whether the restaurant succeeds or fails, so these costs are a given. Let’s say these costs are $600,000.

You would include the price of failure – for example, let’s say you have a $200,000 home that you would lose the restaurant failed. As you have an 80% chance of failure, the expected value is 80% of $200,000 or $160,000 ($160k is the EV-adjusted figure). You repeat this process for all costs of failure. Let’s say that the total cost of failure is $500,000 so the EV-adjusted cost of failure is 80% of $500,000 which is $400,000

So the total costs are $600,000 + $400,000 which is $1,000,000. This $1,000,000 is the EV cost of starting the restaurant.

Then you total up the rewards of success. Let’s say that if your restaurant is a success after two years, it will be worth $5,000,000. Let’s say that furthermore, the additional value of the success in terms of personal satisfaction, job security, freedom etc. is worth an extra $750,000 to you. We now know that the value of success if $5,750,000. We have a 20% chance of success, so the EV-adjusted figure is (0.20 x 5,750,000) $1,150,000. This $1,150,000 is the EV of starting the restaurant.

So, the total expected value of starting the restaurant is simply $1,150,000 – $1,000,000 which is $150,000 over two years. You can then use this figure to compare to your other options, e.g. working in your existing job for two years.

Now obviously, most people aren’t used to assigning dollar values to things like personal satisfaction or their own time, but I hope this little example shows that odds are not for suckers. They are a useful part of the sensible evaluation of decisions, and should be used as such. By the same token, the fact that something has a 99% chance of failure doesn’t mean that you shouldn’t do it – it just means that the value of success should be high enough that 1% of it is worth something to you.

]]>I just read a synopsis of the game and it looks fascinating to a guy like me who plays Civilization, Colonization, and some of the other “God games.”

]]>*THE* Eliot Spitzer? The disgraced former governor of New York, who publicly came down hard against prostitution, while secretly spending thousands of dollars on high-priced call girls and cheating on his wife?

I’m gonna take advice from THAT guy?

]]>Another good two-player game is Hive. You get five different kinds of bugs, each with a unique movement. The object of the game is to surround your opponent’s queen bee. You can try this one online. http://hivemania.com/play/

I’m involved with a board game club. It’s a couple hours of cheap entertainment every week, and it lets you try out a lot of different games.

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