hedonic treadmill avoidance

There's something awful about thinking that personal capabilities are strongly ordered - that for every two people with different capabilities, one of the two can do everything that the other can. This feeling is behind the aversion to taking money too seriously, because money is definitely strongly ordered. If money were everything, I'd either be better or worse than you, with no other possibility.

Thank god money isn't everything then. More accurately, thank god prices do not completely represent my desire for things. If everyone had the same desires and productive abilities, then prices would indeed represent desires, but because of the different desires (demands) and productivities (supplies), there is much to gain from exchanging goods I produce with other people.

To the extent that people conform in their desire for scarce items, however, prices are inevitably accurate measures of personal demand, and it's an endless rat race. To the extent to which prices of things are aligned with the degree what I want them, there is only one way to become happier - to make more money.

1 comment
r

very recently, i was told by my boss, in these exact words, "i want to buy your time spent doing X but not your time spent doing Y". so that provided me with a conclusive answer to the question i ask myself every morning during my 5-minutes negotiating with myself to get out of bed - "why go to work today?" why, the answer is, obviously, "so i can sell my time!"

Risk adversity, flipped

Hat tip: CMoh

http://www.playwinningpoker.com/poker/betting/

In heads-up poker games, if both 22 and AK were to go all-in pre-flop, they would be evenly (very close to 50/50) matched. In real play, however, 22 loses to AK by a big margin. This is because the  betting and folding options are worth a lot more to AK than to 22, which is to say that the unknown flop, turn and river introduce big variances into the AK's expected return.

In that sense, AKs are preferable because their riskiness boosts the value of options possessed.

Lesson: seek risk with respect to which you possess options!