Comments by "L.W. Paradis" (@l.w.paradis2108) on "Game Theory 101: The Allais Paradox (Do Your Preferences Violate Expected Utility Theory?)" video.

  1. You are talking so fast because you can never introduce CERTAINTY and compare it with probabilities, and you're hoping people miss that. For most people, the certainty of receiving a million dollars is comparable with a probability of receiving five million dollars only at very, very high levels, which you didn't posit here. The psychologically established fact of loss aversion is not irrational, unless the marginal value of a million dollars is inconsequential to you. (Dollars are not a rigid yardstick. It is therefore rational for a billionaire to answer this question differently from a person who is unemployed with six months' of savings left.) The upshot: for most people, picking certainty (C) has no bearing on whether they picked A or B in the first instance, because it is always rational (for non-millionaires) to pick C. B and C are just as "right" as are A and C. Picking B doesn't commit them to D. Only a rich person would ever pick D.
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  2. OF COURSE. Perfect. It also fails to acknowledge that dollars are not a rigid yardstick. It is rational to pick D over C only for someone for whom the marginal value of a million dollars is not extremely large -- a multimillionaire, for example. No one rational who is not already quite rich would ever pick D. (Has no one ever had economics?)
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