dr. Imre Bartfai wrote:

> maybe I do not share your concept for linearity. 

Maybe not... but maybe you just didn't understand me, or don't agree with
my concept of gain and loss -- which may not be yours, but you have not
much authority to judge how /I/ weigh gain and loss.


> The expected loss / gain is simply a signed multiplication of the loss /
> gain by odds, and then sum them up. 

That may be the case for you, but it's not for me. Gain and loss are not
objective criteria, they are subjective. Everybody has a different gain and
loss scale. For some, a flower on a plant that rarely blooms may just be as
much gain as they can make from selling it, for others that same event may
be invaluable. For some, gaining $1M may just mean another half year of
work, and for others it's a life changing event. For some, the worth of $1
is simply the difference between having $465 in the pocket or $464: almost
nothing. And for others it's the difference between having enough to eat
today or not. Just a few examples how the scales are quite different for
different people.

Besides, the value (as opposed to the measure) of gain and loss is
definitely not linear for most. It has usually a somewhat linear range in
the middle of the range of numbers one typically deals with in everyday
life, but usually there are non-linear perceptions at the lower and upper
ends. For most, the typical lottery prices are outside the linear range. 

There is very little in nature and even less in human perception that is
linear over a wide range. And I suspect there's nothing that's linear
without restriction. So for everything you claim it is linear, you need to
be aware of the limits of the linear range -- because pretty much always
there are limits. (That goes for resistance just as it goes for lottery
prices :)

All IMO, of course...

Gerhard

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