the allais paradox suppose we are offered a choice between the following two lotter 672732

L₁:

With probability 1, we receive $1 million.

L₂:

With probability .10, we receive $5 million.

With probability .89, we receive $1 million.

With probability .01, we receive $0.

L₃:

With probability .11, we receive $1 million.

With probability .89, we receive $0.

L₄:

With probability .10, we receive $5 million.

With probability .90, we receive $0.