“Nainodelac and Tarleton Nick”: This is not about risk aversion. I agree that if it is vital to gain at least $20,000, 1A is a superior choice to 1B. However, in that case, 2A is also a superior choice to 2B. The error is not in preferring 1A, but in simultaneously preferring 1A and 2B.
“Nainodelac and Tarleton Nick”: This is not about risk aversion. I agree that if it is vital to gain at least $20,000, 1A is a superior choice to 1B. However, in that case, 2A is also a superior choice to 2B. The error is not in preferring 1A, but in simultaneously preferring 1A and 2B.