Choose between the following two alternatives:

- 1. 90% chance of an unknown amount and a 10% chance of $1 million, or
- 2. 89% chance of the same unknown amount , 10% chance of $2.5 million, and 1% chance of nothing.

**References**

Allais, M. ``Le comportement de l'homme rationnel devant le risque: Critique des postulats et axiomes de l'école américaine.''
*Econometrica* **21**, 503-546, 1953.

© 1996-9

1999-05-25