tag:blogger.com,1999:blog-5621914599310831423.post1188769202878392539..comments2024-03-28T09:15:32.976-07:00Comments on The Retirement Café: A Tiny Bit of Game TheoryDirk Cottonhttp://www.blogger.com/profile/05616143752082768155noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5621914599310831423.post-50457410929201911212014-12-15T15:00:59.592-08:002014-12-15T15:00:59.592-08:00Excellent! I promise to let you know where this is...Excellent! I promise to let you know where this is headed the instant that I know.Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-68783409037985747162014-12-15T13:54:51.030-08:002014-12-15T13:54:51.030-08:00Good, I will check in later to find out. Thanks fo...Good, I will check in later to find out. Thanks for interesting posts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-64133928044921120862014-12-15T13:26:40.628-08:002014-12-15T13:26:40.628-08:00You were quite clear about how you feel about your...You were quite clear about how you feel about your decision and I agree with you. You were unclear about where I'm going with this discussion.Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-11575974674038317302014-12-15T12:35:06.794-08:002014-12-15T12:35:06.794-08:00I guess I wasn't clear: I DO think I've wo...I guess I wasn't clear: I DO think I've won the game that I happen to be playing, which is to have a known, steady income stream, even if it isn't optimal. However, others may be playing a completely different one: make as much money as possible, even if there's a significant possibility of failure.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-62378570435620621642014-12-15T11:15:39.274-08:002014-12-15T11:15:39.274-08:00That is SOOOO not where this is going.
I have no...That is SOOOO not where this is going. <br /><br />I have no knowledge of your financial situation but, if anything, game theory would probably suggest that you buy the annuity. Many game theory decision rules are based on avoiding the worst case loss (MAD and Prisoner's Dilemma, for example), which an annuity would do.<br /><br />Game theory lets you assign your own payoffs, so strategies work differently for different people.<br /><br />"Looking dumb" refers to walking around the Sahara in a rain coat. It has nothing to do with financial decisions.<br /><br />Stick with me a while longer.Dirk Cottonhttps://www.blogger.com/profile/05616143752082768155noreply@blogger.comtag:blogger.com,1999:blog-5621914599310831423.post-68059290032855507612014-12-15T10:55:51.518-08:002014-12-15T10:55:51.518-08:00I think I can see where this is going. I bought ...I think I can see where this is going. I bought a plain-vanilla annuity 4 years ago at a payout rate I liked, but of course if I die tomorrow, that money will be gone, none of it available to my kids. If interest rates move up sharply, I will have stupidly short-changed myself.<br /><br />On the other hand, in any case, I still have the payout that I bargained for, and if I live to 105 I'll still get it (albeit much devalued by inflation).<br /><br />Have I "won" or have I "lost"? If I put the correct % of my available funds into this flooring strategy, in my mind I will have won in any case, but perhaps others would feel differently, especially if it mattered to them not to look "dumb", or if they interpret winning differently from me.Anonymousnoreply@blogger.com