[jrz1972]

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I can tell you with 100% certainty that if somebody walked into my office right now and asked me if I would like to flip a coin and get paid $11 if I win while losing $10 if I lose, I would decline the offer. I would also not take this gamble for 1/10th the stakes.


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If you believe the situation, then that is either a mistake, or you are not an advantage gambler.

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It's definitely not a mistake. I just don't like gambling. I like playing poker because it's a fun, challenging game that gives me something to think about. The money is nice, but it's not the main reason why I play.

There is absolutely no reason to make this issue complicated. It's great that you're working on an economics degree and everything, but you're overlooking the obvious issue of revealed preferences. People were given the opportunity to partially hedge, and they chose to fully hedge instead.

That's prima facia evidence that full hedging was EU-maximizing for those people. There is nothing you can do to get around that point. It completely sinks your entire argument. There is no need to postulate funky-looking utility functions. It's just a simple matter of realizing that some people, in fact, do not especially like risk and are willing to part with some EV to avoid even comparatively small gambles.

You're essentially arguing that you know my risk preferences better than I do. That's self-evidently ludicrous and it requires no further argumentation.

I don't know why you keep bringing up the "advantage gambler" thing, but I suspect you're getting confused somewhere between risks that I can AFFORD to take (which I guess is why you keep referencing the Kelly thing) and risks I WANT to take. My bankroll can definitely handle a coin flip for $500, no problem, but that doesn't mean I would choose to take that bet if offered.

When you start with some premises and argue your way to an absurd conclusion, one of two things has happened. Either your argument is logically invalid, or you have disproved your premises. I'm not sure which applies to the argument you tried to make, but you might want to go back and sort it out.