pascals-wager

What is Pascal’s Wager?

Business / By / October 11, 2023

Pascal’s wager is named after Blaise Pascal, a seventeenth-century French mathematician, philosopher, and theologian. Pascal believed that since evidence could not settle the question of whether God existed, individuals should wager on it instead. Pascal’s wager is a philosophical argument positing that individuals should wager their lives on the existence (or non-existence) of God. 

ElementDescriptionExamplesApplications
DefinitionPascal’s Wager is a philosophical argument that suggests individuals should believe in God or practice religion because the potential benefits (eternal reward) outweigh the risks (eternal punishment) of disbelief.– Choosing to believe in a deity– Addressing existential questions and beliefs
Eternal ConsequencesThe wager posits that the consequences of belief or disbelief in God are infinite and eternal, making it a high-stakes decision.– Choosing atheism or agnosticism– Influencing one’s religious or spiritual choices
Belief ChoicePascal’s argument focuses on the choice to believe rather than the actual existence of God. It suggests that even if belief is uncertain, one should choose to believe for the potential reward.– Believing in God for the afterlife– Exploring personal faith and conviction
Rational CalculationThe wager uses a rational and probabilistic approach, comparing the potential benefits and losses of belief versus disbelief in God.– Betting on God’s existence– Decision-making in religious or philosophical contexts
Faith and SkepticismPascal’s Wager addresses the tension between faith and skepticism, highlighting that the expected utility of belief may outweigh the rational doubts.– Embracing religious faith– Contemplating the role of faith in one’s worldview
Critiques and DebatesWhile Pascal’s Wager presents a logical framework, it has faced criticism and debates regarding its assumptions, the concept of God, and the nature of belief.– Exploring the relationship between reason and faith

Understanding Pascal’s wager

Pascal used elements of game theory to support the notion that a belief in Christianity was rational. In arguing the case for rationality, he equated it to a wager:

“Let us weigh the gain and the loss in wagering that God is. Let us estimate these two chances. If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation that He is.”

This wager, Pascal believed, was based on two conditions:

  • People could choose to believe in God or choose not to believe in God, and 
  • God either exists or does not exist.

The four possible outcomes of Pascal’s wager

The two conditions mentioned above yield four possible outcomes:

  1. The person who believes in a Christian God that does exist will gain infinite (eternal) happiness in Heaven.
  2. The person who does not believe in a God that does exist will receive infinite (eternal) suffering in Hell.
  3. The person who believes in a God that does not exist will receive finite disadvantages associated with living a Christian life, and
  4. The person who does not believe in a God that does not exist receives finite pleasures from a life unencumbered by Christian morality.

Criticisms of Pascal’s wager

There have been many criticisms of Pascal’s wagers in the centuries since it was proposed. Those with the most merit are briefly explained below.

The many Gods objection

Some believe Pascal’s wager is too simplistic. Specifically, the focus on a Christian God may prevent someone from receiving the infinite rewards of a God from another religion.

By extension, would someone have to believe in multiple gods or indeed all Gods to realize infinite happiness?

If a Muslim were to apply Pascal’s wager to the existence of Allah as the sole God, then rationality would require them to believe in multiple incompatible hypotheses.

Failing to account for multiple Gods from different religions thus renders Pascal’s wager invalid.

The impossibility objection

Others believe that such a wager is impossible because individuals cannot form beliefs based on their potential benefits.

If someone offered you $100,000 to believe the sky was green, this or indeed any other amount of money would make you believe it was true.

To believe in a God simply for the payoff is the wrong motivation to believe in the first place.

Pascal’s argument and the four outcomes can be represented in a decision table, but this assumes that the same table applies to everyone.

This objection boils down to the different ways in which people perceive rewards. Consider, for example, a predetermined infinite reward for believers in God and finite utility for non-believers.

Which of the two is a more rewarding outcome is subjective, with the prospect of salvation more attractive to some than it is to others. 

Put another way, the hedonistic atheist is more concerned with the pursuit of life pleasure than the miserable puritan who sacrifices this pleasure for a payoff after death. In either case, the decision table of Pascal’s wager is rendered invalid. 

Examples and Case Studies

  • Belief in Karma and Reincarnation: Individuals who believe in the concept of karma and reincarnation may choose to live morally upright lives to accumulate good karma and achieve a better future life. This can be seen as a form of wager, where they act based on the potential consequences of their actions in future lives.
  • Environmental Stewardship: Some people advocate for environmental stewardship based on a similar wager-like idea. They believe that if they take care of the environment and make sustainable choices, it might result in a better future for the planet and future generations. This belief guides their actions and lifestyle choices.
  • Precautionary Principle: In the field of risk assessment and decision-making, the precautionary principle is often used as a form of wager. It suggests that if there is a potential for serious harm or irreversible consequences, even without definitive evidence, preventive action should be taken to avoid those risks.
  • Investing in Long-Term Goals: Individuals who invest in education, skills, and personal development are essentially making a wager on their future success and well-being. They believe that the effort and resources invested now will lead to better opportunities and outcomes in the future.
  • Medical Treatment Decisions: When faced with a medical condition, individuals may consider different treatment options based on potential outcomes. They might opt for more aggressive treatments, even with potential side effects, if they believe it offers a higher chance of survival or improved quality of life.
  • Career Choices: Career decisions often involve weighing potential risks and rewards. Individuals might choose a stable but less fulfilling job for financial security or take a risk on pursuing their passion with the hope of greater long-term satisfaction.
  • Social and Political Beliefs: People’s political and social beliefs may also be influenced by a wager-like thinking. They may align with a particular ideology based on perceived benefits or consequences for society, even if there’s uncertainty about the ultimate outcome.

Key takeaways:

  • Pascal’s wager is a philosophical argument positing that individuals should wager their lives on the existence (or non-existence) of God. 
  • Pascal used elements of game theory to support his idea that a belief in Christianity was rational. In arguing the case for rationality, Pascal equated it to a wager. Individuals could choose to believe in a God (or not) and whether such a God existed.
  • There have been many criticisms of Pascal’s wagers since it was first proposed. Some believe it is overly simplistic and not rational, while other objections relate to the fact that people cannot form beliefs based on their potential benefits.

Key Highlights

  • Origin and Definition: Pascal’s Wager is named after Blaise Pascal, a 17th-century French mathematician, philosopher, and theologian. It suggests that individuals should make a wager on the existence of God since evidence cannot definitively settle the question.
  • The Wager Concept:
    • Pascal used game theory to argue that believing in Christianity is rational.
    • He framed belief in God as a wager: if you believe and are correct, you gain everything; if you believe and are wrong, you lose nothing.
  • Conditions and Outcomes:
    • Two conditions: Belief in God and God’s existence.
    • Four possible outcomes: Gain infinite happiness, suffer infinite suffering, gain finite disadvantages, or gain finite pleasures.
  • Criticisms:
    • Many Gods Objection: Pascal’s focus on the Christian God overlooks potential infinite rewards of other religions.
    • Impossibility Objection: Beliefs formed solely for rewards lack authenticity and genuineness.
    • Subjectivity of Rewards: People perceive rewards differently, making the decision table subjective.
  • Examples and Case Studies:
    • Belief in Karma and Reincarnation: Individuals act morally for better future lives.
    • Environmental Stewardship: Actions for a better future based on potential consequences.
    • Precautionary Principle: Taking preventive action based on potential risks.
    • Investing in Long-Term Goals: Investing now for future success.
    • Medical Treatment Decisions: Choosing treatments based on potential outcomes.
    • Career Choices: Balancing risks and rewards in career decisions.
    • Social and Political Beliefs: Aligning with ideologies based on perceived societal benefits.

Read Next: Occam’s Razor

Connected Thinking Frameworks

Convergent vs. Divergent Thinking

convergent-vs-divergent-thinking
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.

Critical Thinking

critical-thinking
Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.

Biases

biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Bounded Rationality

bounded-rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Dunning-Kruger Effect

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The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

occams-razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Lindy Effect

lindy-effect
The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.

Antifragility

antifragility
Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).

Systems Thinking

systems-thinking
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.

Vertical Thinking

vertical-thinking
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.

Maslow’s Hammer

einstellung-effect
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).

Peter Principle

peter-principle
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.

Straw Man Fallacy

straw-man-fallacy
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.

Streisand Effect

streisand-effect
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.

Heuristic

heuristic
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.

Recognition Heuristic

recognition-heuristic
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.

Representativeness Heuristic

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The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.

Take-The-Best Heuristic

take-the-best-heuristic
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.

Bundling Bias

bundling-bias
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.

Barnum Effect

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The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.

First-Principles Thinking

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First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.

Ladder Of Inference

ladder-of-inference
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.

Goodhart’s Law

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Goodhart’s Law is named after British monetary policy theorist and economist Charles Goodhart. Speaking at a conference in Sydney in 1975, Goodhart said that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure.

Six Thinking Hats Model

six-thinking-hats-model
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.

Mandela Effect

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The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

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The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

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The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.

Moore’s Law

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Moore’s law states that the number of transistors on a microchip doubles approximately every two years. This observation was made by Intel co-founder Gordon Moore in 1965 and it become a guiding principle for the semiconductor industry and has had far-reaching implications for technology as a whole.

Disruptive Innovation

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Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Value Migration

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Value migration was first described by author Adrian Slywotzky in his 1996 book Value Migration – How to Think Several Moves Ahead of the Competition. Value migration is the transferal of value-creating forces from outdated business models to something better able to satisfy consumer demands.

Bye-Now Effect

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The bye-now effect describes the tendency for consumers to think of the word “buy” when they read the word “bye”. In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye bye” before ordering, the average price per meal rose to $45.

Groupthink

groupthink
Groupthink occurs when well-intentioned individuals make non-optimal or irrational decisions based on a belief that dissent is impossible or on a motivation to conform. Groupthink occurs when members of a group reach a consensus without critical reasoning or evaluation of the alternatives and their consequences.

Stereotyping

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A stereotype is a fixed and over-generalized belief about a particular group or class of people. These beliefs are based on the false assumption that certain characteristics are common to every individual residing in that group. Many stereotypes have a long and sometimes controversial history and are a direct consequence of various political, social, or economic events. Stereotyping is the process of making assumptions about a person or group of people based on various attributes, including gender, race, religion, or physical traits.

Murphy’s Law

murphys-law
Murphy’s Law states that if anything can go wrong, it will go wrong. Murphy’s Law was named after aerospace engineer Edward A. Murphy. During his time working at Edwards Air Force Base in 1949, Murphy cursed a technician who had improperly wired an electrical component and said, “If there is any way to do it wrong, he’ll find it.”

Law of Unintended Consequences

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The law of unintended consequences was first mentioned by British philosopher John Locke when writing to parliament about the unintended effects of interest rate rises. However, it was popularized in 1936 by American sociologist Robert K. Merton who looked at unexpected, unanticipated, and unintended consequences and their impact on society.

Fundamental Attribution Error

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Fundamental attribution error is a bias people display when judging the behavior of others. The tendency is to over-emphasize personal characteristics and under-emphasize environmental and situational factors.

Outcome Bias

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Outcome bias describes a tendency to evaluate a decision based on its outcome and not on the process by which the decision was reached. In other words, the quality of a decision is only determined once the outcome is known. Outcome bias occurs when a decision is based on the outcome of previous events without regard for how those events developed.

Hindsight Bias

hindsight-bias
Hindsight bias is the tendency for people to perceive past events as more predictable than they actually were. The result of a presidential election, for example, seems more obvious when the winner is announced. The same can also be said for the avid sports fan who predicted the correct outcome of a match regardless of whether their team won or lost. Hindsight bias, therefore, is the tendency for an individual to convince themselves that they accurately predicted an event before it happened.

Read Next: Biases, Bounded Rationality, Mandela Effect, Dunning-Kruger Effect, Lindy Effect, Crowding Out Effect, Bandwagon Effect.

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About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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