Ruin
Разорение · Risk of ruin · Полное разорение
The class of outcomes from which you cannot recover. Ruin doesn't average out, doesn't get reversed by a winning streak, and ends the game.
Probability isn't enough; you also need to think about absorption. A bet with a 99% chance of $1 gain and 1% chance of total ruin has positive expected value - and is suicidal if you take it repeatedly. The arithmetic that says «you'll win on average» assumes you survive to keep playing. Ruin is the case where you don't.
Most life decisions are repeated, not one-shot. Any strategy that risks ruin will eventually deliver it. Survival is precondition; everything else is optimisation.
Russian roulette is a positive-expectation game if you focus on average. It's also one you cannot play indefinitely. Most «high-EV» bets in real life have a ruin tail.
- 1Never compute average outcomes without first checking: «does any path lead to ruin? At what probability?»
- 2If a ruin path exists at non-trivial probability, eliminate it BEFORE optimising.
This part of the knowledge base is inspired by the book. Go to the Ukrainian edition to explore the concept in depth.
- · Меточка по Талебу - ruin