9 As expected, the gamble was not popular among either group for any of the “anti-expected-value”
gambles, since risk aversion and expected value both militate against it. However, any factors favoring
the gamble over the sure thing (for example, valuing the excitement of gambling or dismissing the sure
amount as negligibly small) would be more likely to tip preferences in favor of the gamble among those
less averse to it (the high CRT group, as judged from items a through h). The gambles in items i through
m were designed, in part, to have some chance of being chosen (the sure amounts were small, and the
expected values of the gambles were typically close to the sure amount). Including choices in which the
gambles lacked these properties (for example, offering a choice between $4,000 for sure and a 50
percent chance of $5000) would be pointless, because nearly everyone would reject the gamble, leaving
no response variance to analyze. Item i comes close to illustrating this point.
10 Although the descriptive accuracy of expected utility theory markedly improves for respondents with
higher scores, it cannot explain why a 75 percent chance of $200 is frequently rejected in favor of a sure
$100, across all levels of cognitive ability, since this is a small fraction of one’s wealth, and even a concave
utility function is approximately linear over small changes (Rabin, 2000).