I’m going to ignore the math here and just say I don’t need the free night and I’ll enjoy the possible upgrade more if it comes through. In other words I’m going to waste money, perhaps frivolously, on something I’ll enjoy.
Why is it a waste? Because I’m probably better off taking the free night, saving $240 in cash I’d otherwise spend on a room, and using that cash for a better room on another stay or indeed on something other than a Marriott upgrade I’ll enjoy more. I’m going to do the thing that’s irrational because I’m rational enough to know that I’ll enjoy the irrationality.