The Economics of Paying for Early Information
Understand the value of early signals and how they change the cost of action.
The Economics of Early Information
This simulation models a real-world investment dilemma: do you go all-in every time, or pay a little up front to avoid bad bets?
Across 1,000 rounds of a 2-digit lottery (00–99), you'll compare two strategies for trying to win a $2000 prize per round:
Strategy A – No Feedback
You pay $20 every round to guess the full number. Wins only happen on exact matches.
Strategy B – With Feedback
You pay $10 to check if the first digit matches. Only if it does (≈10% of the time), you pay another $10 to guess the full number.
Both strategies see the same winning numbers each round — the difference is how you invest your money. Strategy B helps avoid wasting resources by using early feedback to skip poor bets.
Key takeaway: Even when feedback costs money, it can help you spend smarter and lose less over time. Run the simulation to see the trade-offs play out.