alt Hacker NewsYou understand expected value right?
I'm not mathemagician, but a tiny fraction of a billion with a b dollars is worth filing.
If nothing else it gives us all an exciting news cycle.
Replies
claiir • today at 7:54 AM
yea my thought exactly. especially if the lawsuit expenses are on contingency, what is there to lose by filing?
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Expected value usually assumes these things happen in isolation, and they don't. They are good at representing the isolated upside, but rarely do they account for the downside.
In this case a 1% chance of $1bn represents an expected value of $10m. If you accept the cost of litigation as $10m (for example), then your expected value is actually zero. And if you think about the outcomes of the 99% of cases, bankruptcy is hugely painful.
One can always play silly games with expected value. If the "value" of a human life is $10m (supposedly a figure used by some governments), you could pose all sorts of expected value scenarios, but when it's your life that all goes out of the window.