Monthly Archives: December 2013

Train and Track

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Risk and Reward

Let us say you are in a game show. You are given a choice of two options A and B. With option A, you obtain a reward of Rs. 1 crore. With option B, one of two outcomes is chosen … Continue reading

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Poker

Poker is an interesting card game involving aspects of risk-taking, skill, chance, probability and psychology. This game serves to illustrate two concepts we have discussed before – randomness and sunk-costs. The following discussion will refer to the “Texas hold ’em” … Continue reading

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Sunk Costs

A sunk cost is an investment into an enterprise or scheme that has already been committed. It cannot be reverted. For instance, consider the act of reading a book. The number of hours you spend reading a book is the … Continue reading

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