= Allais effect
{wiki=Allais_effect}
The Allais effect, named after the French economist Maurice Allais, is a phenomenon in behavioral economics that demonstrates how people's choices can violate the expected utility theory, which assumes that individuals make decisions to maximize their expected utility based on probabilities. The effect specifically highlights inconsistencies in people's preferences regarding different lotteries. In a typical Allais paradox experiment, participants are presented with two sets of choices involving lotteries with varying probabilities and outcomes.
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