Thread by @nntaleb

1) This is a grrrrreat case study by Maestro Bogomolny @CutTheKnotMath showing OPTIONALITY matters more than skills: You can have >53% chance of winning when odds are against you is you have the option of switching between 2 (strategies, both of which have odds against you).

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2) Here is my solution, will generalize showing results across all regimes.

Convexity (optionality) beats skills. Any time.

#Antifragile
@CutTheKnotMath

3) The general principle #Antifragile is that when the payoff is bigger or you have your back to the wall you go for maximum variance (convexity).
When the downside is bigger you go for minimum variance.

Why explains why winning teams mark time and losing teams take risks.

4) This is another example where pathologizing mental accounting by the Uberklueless and Verbiagiastic Richard Thaler @r_thaler fails: his model considers such path dependent strategies irrational.

5) There is this great theorem by Dubins and Savage, but I owe the much simpler games example to Cliff Asness @CliffordAsness who mentioned it in 1999 at lunch in NYC.

amazon.com/How-Gamble-You…