Friday, September 30, 2011

Should I say yes or should I say no?

Without mathematics, how would I know how to make good decisions?
Quick example: I like two jobs equally, one offers $1 a month and the other $1.20 per month. Which should I take (assuming they're the same in every other way?) Ok, that was too easy.

How about this, I could pay N100 to enter a lottery that pays out N1000 to one winner. Should I do it?
In maths actually, when things are uncertain, you think of "expected values." In this example, if you're spending N100, what do you EXPECT to receive? Mathematically, you multiply the amount by the PROBABILITY to get the EXPECTED AMOUNT.

Answers: If I have a 50-50 chance of winning (like if only two people entered the lottery) then yes, go for it!  On the other hand, if I have a 1 in 100 chance of winning, then I should just keep my money and wait for a better opportunity.

Why? In the first case, the expected payoff is big, you expect to get N1000 * 50% = N500 for spending only N100
in the second case, the payoff (expected) is negative since you expect to get N1000 * 1/100 = N10 only, which is less than the N100 you spent.

The gray area: sometimes a positive payoff may not be worth it (but that's a question of psychology or other factors, which you can learn to include in your calculations as well).  If you think about it, this DECISION THEORY stuff can help you make many different kinds of decisions in a way that is rational.

This is the JULY 2011 blog post - I'm still playing catch-up

Wednesday, September 7, 2011

Khan Academy makes math-lovers

When you visit, go straight to PRACTICE. Within one hour, math has become a fun, competitive sport. At least that's what my young cousin experienced; for days, he kept going back to do more math drills and score more points and badges.

So don't hate math, just play Khan.

For older folk, Khan trains in Contemporary Finance topics (example: Systemic Risk), Aptitude tests like SAT and GMAT, Entrance exams like IIT JEE (India), standard curricula like Singapore and some US states, a bit of the sciences - physics, chemistry...all for the price of your video-capable internet connection.

JUNE 2011 POST (to make up for being MIA ;)

My Other Blogs

  • #Glocal #business #news bits - With these types of forums (Breakfast chats with seasoned founders and CEOs), we can share our experiences and fast track our growth - Deji Akinyanju (Fo...
    11 hours ago
  • Prizes - Top of the top: 10 Nobel Laureates Who Changed The World See all the Nobel Prizes. Advertisement: Read my books. - [image: Nobel Prizes in Physics,...
    2 days ago
  • Who Will You Marry? Answer in the comments :) - Really good quiz here, you answer 10 questions and it reveals 'who is the right person for you' :) I want to know what result you got, so comment. And ...
    5 days ago
  • o O ~ circles ~ O o - Want REALbubbler Membership? Want fine African Literature? (Preview) Nigerian Lifestyle A-Z at
    2 weeks ago
  • Paradise Road - It was a morning like any other morning, on a road like any other road. 8 a.m. “Conductor, give me my change.” The dust, smoke, and everything were ma...
    4 weeks ago

About Me