This truth is that the mathematical expectation of a group of people in space, that is, at the same time, is different from that of time, that is, a person has walked many times in a row. Mathematically, this is called "ergodicity". If the mathematical expectations in space and time are the same, this is called ergodicity.
In 20 16, Peters and gherman wrote a paper, saying that scholars who studied social science for hundreds of years made a mistake on this ergodic problem. Their mistake is to confuse the probability of a set with the probability of time.
In this article, I gave an example. For example, there is a coin gambling game now. If you invest 1 yuan, its 50% probability will become 0.6 yuan, and 50% probability will become 1.5 yuan, which means you will either lose 40% or earn 50%. So, your math expectation is plus 5%, right? So according to psychologists, you should resolutely finish this game, right?
But don't worry, Peters and gherman said that there are two ways to play this game.
One way to play is to only play 1 yuan at a time. Suppose you have unlimited 1 yuan. If you can keep playing, you will really make money in the long run. Mathematical expectation can be used, and you win an average of 0.05 yuan. This is an additive relationship. But the real investment in life is generally not played out bit by bit. More commonly, you bet all available funds on this game. After the first game, no matter how much or how little the result is, you can gamble all the remaining money again and continue to play.
This kind of play is nothing more than multiplication. So what is your most likely outcome? This is the settlement account. Let me help you figure it out. For example, if you play two games and win or lose on average, then the total assets should be multiplied by 0.6 and then by 1.5, and the result is equivalent to multiplying by 0.9. You lose 10% every two games on average. If you keep playing like this, you won't need much to empty your assets.
This is the power of ergodicity. The first game is ergodic, but the speed of making money is too slow. No one is interested in real life. The second game is more practical, but there is no ergodicity. For a system without ergodicity, "mathematical expectation" doesn't make much sense. But so many scholars who study psychology, decision science and behavioral economics in history have never considered ergodicity.
Of course, not everyone has not considered it. Such as Shannon and others, because they are geniuses. Of course, traders are not geniuses, but they are right because traders have stakes. Traders all know this truth. If you really have plenty of money on hand, you can choose a slightly riskier investment. But if you don't have much money, you must be careful again, otherwise you may lose all your money and be disqualified from playing again. Traders never know what mathematics will bring. Psychologists have no interest, but they also believe that traders are psychologically biased.
This truth is that if there is the possibility of losing everything, mathematical expectations are meaningless. The so-called aversion to loss is actually people's instinctive aversion to this gambling game, and it is an attitude of preventing minor delays, overcorrecting and not being evil first, not irrational.
Buffy famously said that the difference between successful people and truly successful people is that truly successful people say no to almost everything. Caution is not a problem.