One theory of decision making says you ought to maximize your expected returns, where an expected return is the outcome multiplied by the probability of winning it.

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It has also held that materiality of contingent or speculative events or information depends on balancing the probability that the event will occur and the expected magnitude of the event.

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But one of the most mind-bending is the low probability prediction that one of the five companies expected to launch a drug next year will actually manage to deliver good stock performance.

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Anything lower reduces the expected cost of criminality, without doing anything to improve the probability of detection. (Treating whistleblowers leniently is consistent with this logic: letting them off punishment raises the odds of truth-telling, and therefore of detection.) There are plenty of arguments against ultra-high fines, however.

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Varadhan, New York University, for his work in probability theory, especially his work on large deviations from expected random behavior which has revolutionized this field of study during the second half of the 20th century, and become a cornerstone of both pure and applied probability.

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