Monday, November 15, 2010

Life is a Gamble!?!

When I created this blog, the purpose was to help my students gain awareness of how mathematics is essential in many facets of our lives. Interestingly, I have realized that I am also gaining awareness of how I use mathematics seamlessly in my personal life.



My wife and I recently were discussing how to pay our monthly bills with my paycheck, because unfortunately, she did not receive her paycheck from a new job she got recently. We did not know the reasons why she did not receive her paycheck, but we knew that we have to pay the bills of the current month. My wife and I sat in the kitchen table discussing which bills should be paid or not based on many factors, such as late fees, damage to our credit line, and so forth. In a way, we were applying mathematics to our decision process because we were making calculated risks to decide which bills to pay or not.



I encourage you to read the article "Lectures Explore the Math of Decision-Making" because it brought up in me the realization of how many times I make decisions based on calculated risks. I hope you find the article as interesting as I did.

Amplify’d from media.www.elvaq.com

Lecture Explores the Math of Decision-Making

FIGURE 2: The different types of gamblers.
"People take risks at the casino but also in life," said Math Professor Sid Kolpas
As the returns on bets fluctuate, so does the gambler's mood and betting strategy.
How a human gambler responds to gain and loss is not symmetric like it is for Homo œconomicus, an imaginary being Allen dreamed up to demonstrate the rational, predictable decision-maker. "Homo œconomicus has only one desire: to increase his wealth."
Homo œconomicus would never play the lottery because the odds of winning the lottery are about one in 100 million, which is 0.000001 percent.
People tend to overreact to small probability events.
"What I'm interested in personally are the other types of gambles we have to make: who to marry, which house to buy and when to buy it, whether society can afford to ignore global warming."Read more at media.www.elvaq.com

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