Double or nothing

You know how in certain games, after winning something you can test your skills and luck by going double or nothing. The premise is simple, you could choose to keep what you have, or you could play another game that will double your winnings but take away everything if you lose.

The thing about this is that assuming you have the same odds of winning vs losing (50% chance of winning and 50% chance of losing), going double or nothing gives you the same expected winnings. This is because half the time you'll get twice the winning and the other half you'll get nothing. Summing that up, we can see that the expected winning is the same as the initial winning.

So then it becomes a discussion of whether you're risk averse or risk taking and how tolerant to risk you are. It also becomes a discussion of your 'utility' at each level of winning. If keeping your initial winnings is enough to win you the game, there's no need for you to go double or nothing and risk losing that initial amount. On the other hand, if you really need that extra double and value that extra a lot, going double or nothing would be a no-brainer.

This so far, has been assuming that the chances of winning and losing are equal. If these chances are uneven, then we also have to take these chances into account. If you have a reason to believe that the probability of winning is high, it might incentivize you to go for the double.

The thing is, we face situations like this in our lives all the time. Do we go all out and risk losing what we have or do we play safe and just keep what we have already? Oftentimes, it's tricky to say because we don't know whether the odds favor us or not. Many times, we don't even know how 'happy' we would be at each state.

For example, when you're in the friendzone, pushing for a relationship is like going for double or nothing. However, as we all know, it's hard to judge what you're supposed to do in that situation. What are the chances that this works out? Are you willing to lose such a good friend? Will you really be happier if you get into a relationship? All these unknowns make the situation complicated.

Another thing that make these sorts of situations tricky is the fact that in real life there usually isn't a clear 'win state'. Life is full of trades where winning something requires you to lose something else. This means, sometimes, even if you 'win' the double or nothing, you might not have truly won as the cost might've been greater than the reward.

Some decisive people have the ability to wager these chances better than most. I believe that this ability gives them a big advantage. As Sun Tzu once said, "If you know the enemy and know yourself, you need not fear the result of a hundred battles". I believe that these decisive people must try and fail multiple times in these sorts of wagers. In a sense, taking these double or nothing gambles gives you more of an insight of yourself. It is true that you might not really know the odds of winning going into the wager, but the only way to get a better feel of these odds is to go for it. That way, in the future, you can have a better read of the situation. As it is only in the unknown that there are new things to learn.

Sidenote: 'Double or nothing' makes sense as a saying, but 'Go big or go home' doesn't really make sense. 'Go big or go home' makes it sound like you could only choose one or the other, but the thing is most of the times, if you do decide to 'go big', you'll still have the option of going home afterwards. Just a random thought.