To hedgers: Adding insult to injury

[econophile]

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Your first attempt was to assume that there is a kink at +$475.

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It's no coincidence that the kink is at $475. The kink is at $475 precisely because that is the risk-free amount that someone can decide to risk part or all of for some higher EV. It makes sense when you are trying to model regret to make the reference point what the person wishes they would have done if things go wrong. For instance, if the steelers lost, some people who didn't hedge might think "if only i had hedge, i would have won $475 instead of nothing."