A numeric example demonstrating violations of expected utility theory Consider two choices: 1 A = [0.9, 0, 0.1] or B = [0.89, 0.11, 0] 2 A 0 = [0.01, 0.89, 0.1] or B O = [0, 1, 0] What would you choose in each case? Some people would choose: A over B (winning under A is just less likely, but gives much more money). 2 B O over A 0 ($1,000,000 is guaranteed by B 0; don't want to "get greedy" a These people's preferences violate the independence axiom