Bah — Finance Majors
Or — as we call them around here — idjits.
I mean, how else can you explain the fact that when presented with a game rigged in their favor and offered the chance to bet real money repeatedly playing the game … in any amount they choose … as many times as they could play in 30 minutes
A full third of them lost money! More than a quarter of them went broke! Some of the test subjects were making a living working in investment firms!
Idiots, I say.
Certainly not gamers.
Definitely not gamers with a background in engineering or math.
Of the 61 subjects, 18 subjects bet their entire bankroll on one flip, which increased the probability of ruin from close to 0% using [the optimal strategy] to 40% if their all-in flip was on heads, or 60% if they bet it all on tails, which amazingly some of them did.
Read the full paper (Rational Decision-Making under Uncertainty: Observed Betting Patterns on a Biased Coin) then consider where your retirement savings are.
(Mine are in index funds).