Consider the Allais paradox described on pageĀ allais-page: an agent who prefers $B$ over $A$ (taking the sure thing), and $C$ over $D$ (taking the higher EMV) is not acting rationally, according to utility theory. Do you think this indicates a problem for the agent, a problem for the theory, or no problem at all? Explain.

Consider the Allais paradox described on pageĀ allais-page: an agent who prefers $B$ over $A$ (taking the sure thing), and $C$ over $D$ (taking the higher EMV) is not acting rationally, according to utility theory. Do you think this indicates a problem for the agent, a problem for the theory, or no problem at all? Explain.





Submit Solution

Your Display Name
Email
Solution