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Usenet Newsgroups : rec.puzzles Hall of Fame


The rec.puzzles Hall of Fame is a compilation of over 500 of the most popular puzzles that have been posted and discussed in the rec.puzzles newsgroup. In most cases a detailed solution has been provided.

Many of these puzzles also appear in Braingle's own collection.

   
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Categories : decision : allais.p

The Allais Paradox involves the choice between two alternatives:

	A. 89% chance of an unknown amount
	   10% chance of $1 million
	   1% chance of $1 million
	B. 89% chance of an unknown amount (the same amount as in A)
	   10% chance of $2.5 million
	   1% chance of nothing

What is the rational choice?  Does this choice remain the same if the
unknown amount is $1 million?  If it is nothing?


Solution


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