---
id: 2026-05-30T17:17:11-0400
title: 2026-05-30 17:17:11
tags: []
daily: "[[2026-05-30]]"
---
# 2026-05-30 17:17:11

Valuation of goods and services
as a function of supply and demand
can not adequately explain the behavior of individuals.
The concept of [[utility]], or **satisfaction**, can.

It is satisfaction, not dollar value,
which influences decision-making.
losing \$100 is usually _more unsatisfying_
than gaining \$100 is _satisfying_.

***

**[[risk]]** is the possibility of an unsatisfactory outcome.

If you enter an agreement
which will cost you \$100 to \$120
\$20 is **at risk**.
We don't say that \$120 is at risk,
because at least \$100 will certainly be spent.

***

I have never installed a gutter.
I have no basis for the cost of the materials
nor the labor hours necessary.
I can therefore never determine
if the service is "worth" the cost quoted to me.

I can, however, estimate how _satisfied_ I would be
with gutters on my house,
and how _unsatisfied_ paying the quote would make me.
With this information I can determine
if agreeing to the service is net positive:
if I'd be more satisfied than I was before.

Seeking multiple quotes would only tell me
what other contractors are getting away with charging.

***

Milo has an apple tree in his backyard.
Every August it gives him many buckets of apples,
so many that he could never eat them all himself.

Milo keeps track of how many apples his tree produces.
Since the tree reached maturity
Milo has has harvested around 300 apples per season,
and always at least 200.
He prefers to keep 100 apples for himself.
The rest he gives to his neighbors, friends, and family.

***

YouTube video title: "Risk Management Explained in n Minutes Using Minecraft"