Alternatively it trains you to be more risk neutral.
I’m assuming that the individuals have divided their funds into “risk neutral” and “risk averse” in a discrete way, rather than with a continuous utility function. This makes sense when there’s a clear discretionary / non-discretionary split; I can easily adjust my entertainment budget this month to compensate for losing $100, but I might not be able to easily adjust my rent budget to compensate for losing $1000.
If people don’t have any funds they consider risk-neutral, then I think that doing some sort of gambling to develop the psychological skill of risk neutrality is important, but I doubt this is the optimal way to do that training.
Alternatively it trains you to be more risk neutral.
I’m assuming that the individuals have divided their funds into “risk neutral” and “risk averse” in a discrete way, rather than with a continuous utility function. This makes sense when there’s a clear discretionary / non-discretionary split; I can easily adjust my entertainment budget this month to compensate for losing $100, but I might not be able to easily adjust my rent budget to compensate for losing $1000.
If people don’t have any funds they consider risk-neutral, then I think that doing some sort of gambling to develop the psychological skill of risk neutrality is important, but I doubt this is the optimal way to do that training.