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Behavioral Mathematics for Game AI by Dave Mark

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Marginal Risk vs. Marginal Reward

Marginal utility is used for more than just determining the relative importance of things we are either acquiring or already have (such as the soldiers and health). Marginal utility can also be used to weigh things that we are either giving up or putting at risk.

For example, each additional dollar of our money that we spend has an increasing marginal utility. While we may be willing to spend our first or second dollar, we may not be as enthusiastic about spending our last dollar. Along the way, each additional dollar that we spent meant more and more to us.

In the example of purchasing the warranty for a computer in Chapter 7, one question that was never addressed but is relevant in an intriguing sort of way ...

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