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> By adding risk and reward to determine outcome value, Tao is claiming that outcome value is increased by riskiness.

Tao talks about minimising "value at risk" which he defines as risk MINUS reward. If you prefer to switch signs and talk about maximising "outcome value" then that would be reward MINUS risk.

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“For instance, a "safe" action might have a reward of 5 and a risk of 3, which I would represent as 5±3 in this model, the return would typically range anywhere from 2 to 8 units of net benefit.”

He is literally adding risk and reward to determine the upper net benefit bound.

I wonder if you missed the three follow-up posts? It's really in those that his analysis takes shape. What you call the "upper net benefit bound" plays no part in it.

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