29.2 In the Appendix to Chapter 17, we introduced the Allais Paradox. It went as follows: Suppose there are three closed doors with $5 million, $1 million, and $0 behind them. You are first offered a choice between Gamble 1 (G1) that will reveal the $1 million door with certainty and Gamble 2 (G2) that will open the $5 million door with probability 0.1, the $1 million door with probability 0.89 and the $0 door with probability 0.01. You get to keep whatever is behind the door that is revealed. Then, you are offered the following choice instead: either Gamble 3 (G3) that reveals the $1 million door with probability 0.11 and the $0 door with probability 0.89, or Gamble 4 (G4) that opens the $5 million door with probability 0.1 and the $0 door with probability 0.9.

A. It turns out that most people will pick G1 over G2 and G4 over G3.