Charlottesville Concert and Minimax Regret

We all know there is a lot of hype about the Charlottesville Concert coming this Sunday. I mean, tickets were FREE (+7.50 shipping and handling)! However, personally, there are aspects of the marginal cost that are not included in the price. This includes my Econometrics test on Tuesday. As a risk adverse individual (which in this case means that I am a 4th year and have FOMO, fear of missing out), whether I attend the concert will be based on where I can minimax regret.

The two states of the world are that the concert are S1= worth it (aka awesome) or S2= not worth it (aka lame). The two alternatives I will choose from are A1=to attend, or A2= to stay home and study instead. My marginal cost for attending the concert is $7.50 (assuming I could sell my ticket for this amount otherwise), plus the opportunity cost of studying for econometrics, perhaps 10 points on a test, which I value at $100. My marginal cost is therefore $107.50. My marginal benefit of attending the concert, given that it is awesome (therefore P=1), is $1,000,000. I will have the best night of my college career, have priceless memories with friends, and tell my grandkids about it. It will be like winning the lottery to me.

My regret table looks something like this:

	S1 Concert is AWESOME	S2 Concert is lame
A1 Attend Concert	0, no regret	Marginal Cost= $107.50
A2 Don’t Attend	Marginal Benefit ($1,000,000)-Marginal Cost ($107.50)= $999,892.50	0, no regret

I am going to choose the Ai which minimizes my maximum regret. Since $107.50 < $999,892.50, I will attend the concert!