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xmarai64 karma

Splitting the difference is something like, you and your wife agreeing to 1% milk, when in reality you like 2% and she likes 0%. Neither of you end up being happy, because you "split the difference".

Splitting the pie implies that you portion different segments to make everyone happy. Suppose you care more about milk fat compared to your wife, so you guys get the 2% milk. And, she in return gets to choose what type of bread to buy, because she cares more about bread than you do.

The pie is split in such a way that you get your way in X, and partner gets their way in Y. Instead of splitting down the middle between X and also in Y.

xmarai1 karma

HI Professor Nalebuff!

Thank you for doing this. I stumbled on Life cycle investing yesterday, and here you are! Would you recommend leveraging up in those sort of ways to someone who is UHNW and young? Or is that unnecessarily risky?

If the principles hold true for a couple zeroes, does it work for large portfolios too?

Thank you again for your time.

xmarai1 karma

Thank you for the correction. This concept is beautiful.

Surprisingly, I have used this before in my life, but never gave it a term. Now I know what to call it.