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"Fooled by Randomness" talks about the same phenomenon: People are more likely to pursue an investment strategy that demonstrates common, small increases in value while exposing them to rare, large decreases over one with common, small decreases in value while exposing them to rare, large increases, because it's psychologically difficult to persist while seeing bad results every day even if the magnitude of those bad results is so small so as to be inconsequential.


Sounds like a good philosophy on which to build a casino. If only people would be willing to bet variable amounts.




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