I would further predict that if someone is wealthy enough, or if the winning amount is small, e.g. $24 and $27, they are much more likely to choose 1B over 1A—because of how much less emotionally devastating it would be to lose, or rather, how much less devastating the participant imagines losing to be.
I decided to Google for literature on this and found this analysis. It takes some effort to decode, but if I understand Table 1 correctly, (1) experiments testing the Allais Paradox have results that often seem inconsistent with each other, and strange at first glance (roughly speaking, more people choose 1B & 2A than you’d think), which reflects a bunch of underlying complexity described in section 3; (2) to the extent there is a pattern, I was right about the smaller bets; and (3) the decision to maximize expected financial gain (1B & 2B ≃ RR in Table 1) is the most popular choice in 43% of experiments.
I would further predict that if someone is wealthy enough, or if the winning amount is small, e.g. $24 and $27, they are much more likely to choose 1B over 1A—because of how much less emotionally devastating it would be to lose, or rather, how much less devastating the participant imagines losing to be.
I decided to Google for literature on this and found this analysis. It takes some effort to decode, but if I understand Table 1 correctly, (1) experiments testing the Allais Paradox have results that often seem inconsistent with each other, and strange at first glance (roughly speaking, more people choose 1B & 2A than you’d think), which reflects a bunch of underlying complexity described in section 3; (2) to the extent there is a pattern, I was right about the smaller bets; and (3) the decision to maximize expected financial gain (1B & 2B ≃ RR in Table 1) is the most popular choice in 43% of experiments.