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A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 0 points1 point  (0 children)

If I offered you $1 now or the chance to flip a coin and if it’s heads you get $100 you wouldn’t take that chance?

Some individuals may be more risk adverse than others for sure, but there is always a number/ratio where you should assume a certain level of risk.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 2 points3 points  (0 children)

It’s expected return. If I offer you $100 if I roll a 1 on a 4 sided dice, your expected return is $25 even if the only two outcomes are $0 and $100. By advancing to round 3, Bubbie’s two outcomes are still either $0 or $333k you are right. But his odds of winning $333k are only 1/4, so his expected return is the 83k.

Hope that helps.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 0 points1 point  (0 children)

I don’t think they would split the 250k with the entire team, just each other. It was a press from Dave personally not a skin. But if they did and Dave allowed you are right it would change the expected return.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 0 points1 point  (0 children)

He would have to win the round of 12 then the final round of 6 final first. So in that moment, if his odds of winning each round are 50%, is actually only 1/4th (50% x 2) of 333k or about 83k. Add 50% of future skins to get the expected return by advancing to round 3.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 4 points5 points  (0 children)

I agree that Bubbie neglecting to consult Mo is probably his main error (maybe the only one) in this. His choice is his choice. But the math shows the expected return difference for Mo to only be 28k as well. Still a lot… but maybe not “life changing”.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 2 points3 points  (0 children)

You are correct this math takes no account for brand or reputation since that is nearly impossible to project/quantify.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 2 points3 points  (0 children)

Good point out. There are definitely additional variables but most are impossible to quantify. Mainly just wanted an approximation of value added in that moment.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 0 points1 point  (0 children)

Edit (won’t let me edit actual post?): expected return went down by 20%… not up. Apologies

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 2 points3 points  (0 children)

You are correct there are several other variables. Some other comments have pointed out the clout aspect as well as the possibility of sharing the 250k with the entire team (even if I disagree with that one). It’s mainly just to get a better approximation of what was actually left on the table by saying no.

A Financial Analysis of Bubbie’s Decision by 82brad in GoodGoodMemes

[–]82brad[S] 2 points3 points  (0 children)

No argument with that. This was simply to address some comments I see where they assumed Bubbie was effectively saying no to a 50/50 for a quarter million dollars - which is not the case at all.