Allais Paradox
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
A decision paradox proposed by Maurice Allais, showing that people exhibit risk aversion when facing certain gains, but violate the consistency requirements of expected utility theory when facing probabilistic choices.
SCAFFOLDING EFFECT
Reduce cognitive load
A test of rational decision-making. It reveals systematic biases in human decision-making, particularly the certainty effect. In formulating business strategies or public policies, understanding this bias helps design incentive mechanisms that better align with actual human behavior.
Anchor fast decisions
The Allais paradox shows that people's choices between certain and probabilistic gains violate expected utility theory, demonstrating that the independence axiom does not hold and revealing a preference for certainty.
MINIMUM ACTION
In progress 0/3Practice this model in one real situation:
account_treeGenealogyexpand_more
menu_bookReferencesexpand_more
Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Allais_paradoxverified
PRIVATE NOTES · Only visible to you
SAVED Q&A
ENTRY Q&A · Private saving available
Ask with a clear boundary
thinkingmodels answers from published entry context only.
Your question is sent to thinkingmodels. The answer uses public entry context only.
RELATED MODELS