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    Allais Paradox

    Definition

    In identical experiments, an Allais paradox occurs when the addition of an independent event influences choice behavior. Consider the choices in the following table. lottery | 1 to 33 | 34 | 35 to 100 | preference A | 2500 | 0 | 2400 | 18% B | 2400 | 2400 | 2400 | 82% C | 2500 | 0 | 0 | 83% D | 2400 | 2400 | 0 | 17% In Experiment 1, a choice of A and B was given, and most participants picked B. In Experiment 2, a choice of C and D was given, and most participants picked C.

    Associated person

    Maurice Allais

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