Allais paradox
E548438
The Allais paradox is a famous decision-making puzzle in behavioral economics that shows how people's choices under risk often violate the expected utility theory, revealing systematic inconsistencies in rational choice models.
All labels observed (1)
| Label | Occurrences |
|---|---|
| Allais paradox canonical | 1 |
How this entity was disambiguated
This entity first appeared as the object of triple T5823545 — resolving that mention is where its identity was fixed. The disambiguator weighed these candidate entities and picked the highlighted one (or “None”, minting a new entity). This is how homonymy is resolved: the same surface form can point to different entities.
NED1
Entity disambiguation (via context triple)
gpt-5-mini-2025-08-07
Target entity: Allais paradox Context triple: [Prospect theory, addresses, Allais paradox]
-
A.
prospect theory
Prospect theory is a behavioral economic framework that explains how people actually make decisions under risk and uncertainty, highlighting systematic deviations from the predictions of classical expected utility theory.
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B.
Arrow paradox
The Arrow paradox is an ancient philosophical argument that challenges the coherence of motion by claiming that a flying arrow must be motionless at every instant of its flight.
-
C.
Sen’s liberal paradox
Sen’s liberal paradox is a result in social choice theory showing that even minimal individual rights can be incompatible with always achieving Pareto-efficient collective decisions.
-
D.
expected utility theory (with John von Neumann)
Expected utility theory (with John von Neumann) is a foundational framework in economics and decision theory that models how rational agents make choices under uncertainty by maximizing the expected value of a utility function.
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E.
Fisherian intertemporal choice theory
Fisherian intertemporal choice theory is an economic framework, developed by Irving Fisher, that explains how rational individuals allocate consumption and savings over time to maximize lifetime utility given their income, preferences, and interest rates.
- F. None of above. chosen
- G. Unsure - the case is ambiguous/there is not enough information to decide.
NED2
Entity disambiguation (via description)
gpt-5-mini-2025-08-07
Target entity: Allais paradox Target entity description: The Allais paradox is a famous decision-making puzzle in behavioral economics that shows how people's choices under risk often violate the expected utility theory, revealing systematic inconsistencies in rational choice models.
-
A.
prospect theory
Prospect theory is a behavioral economic framework that explains how people actually make decisions under risk and uncertainty, highlighting systematic deviations from the predictions of classical expected utility theory.
-
B.
Arrow paradox
The Arrow paradox is an ancient philosophical argument that challenges the coherence of motion by claiming that a flying arrow must be motionless at every instant of its flight.
-
C.
Sen’s liberal paradox
Sen’s liberal paradox is a result in social choice theory showing that even minimal individual rights can be incompatible with always achieving Pareto-efficient collective decisions.
-
D.
expected utility theory (with John von Neumann)
Expected utility theory (with John von Neumann) is a foundational framework in economics and decision theory that models how rational agents make choices under uncertainty by maximizing the expected value of a utility function.
-
E.
Fisherian intertemporal choice theory
Fisherian intertemporal choice theory is an economic framework, developed by Irving Fisher, that explains how rational individuals allocate consumption and savings over time to maximize lifetime utility given their income, preferences, and interest rates.
- F. None of above. chosen
Statements (45)
| Predicate | Object |
|---|---|
| instanceOf |
behavioral economics concept
ⓘ
decision-making paradox ⓘ paradox in decision theory ⓘ thought experiment ⓘ |
| category |
paradoxes in economics
ⓘ
paradoxes in probability and decision theory ⓘ |
| challenges |
independence axiom of expected utility theory
ⓘ
rational choice models ⓘ |
| contradicts | expected utility theory ⓘ |
| coreIdea |
people overweight certain outcomes relative to probable ones
ⓘ
preference patterns can be incompatible with a single utility function ⓘ |
| demonstratedBy | pairwise choice problems ⓘ |
| describedIn | “Le comportement de l’homme rationnel devant le risque” NERFINISHED ⓘ |
| field |
behavioral economics
ⓘ
decision theory ⓘ microeconomics ⓘ |
| hasExample |
choice between a sure gain and a high-probability large gain
ⓘ
choice between two risky lotteries with no sure outcome ⓘ |
| illustrates |
certainty effect
ⓘ
context-dependent preferences ⓘ inconsistency in preferences under risk ⓘ preference reversals ⓘ risk aversion for gains ⓘ violations of expected utility maximization ⓘ |
| influenced |
development of prospect theory
ⓘ
non-expected utility models ⓘ |
| involves |
choices between lotteries
ⓘ
monetary gambles ⓘ probabilistic outcomes ⓘ |
| languageOfOriginalPublication | French ⓘ |
| namedAfter | Maurice Allais NERFINISHED ⓘ |
| proposedBy | Maurice Allais NERFINISHED ⓘ |
| publicationYear | 1953 ⓘ |
| relatedTo |
Ellsberg paradox
ⓘ
St. Petersburg paradox NERFINISHED ⓘ independence axiom ⓘ prospect theory NERFINISHED ⓘ |
| shows |
different attitudes to risk across equivalent problems
ⓘ
sensitivity to certainty in outcomes ⓘ systematic preference inconsistencies ⓘ violations of expected utility axioms ⓘ |
| typicalOutcome | majority choice pattern violating independence axiom ⓘ |
| usedIn |
behavioral decision research
ⓘ
experimental economics ⓘ tests of expected utility theory ⓘ |
How these facts were elicited
The pipeline generated the facts above by prompting gpt-5.1 with this entity's name + description and the instruction below.
Instruction
You are a knowledge base construction expert. Given a subject entity and a description of it, return factual statements that you know for the subject as a JSON list of dictionaries(triples), where keys must be "subject", "predicate" and "object". The number of facts may be very high, between 25 to 50 or more, for very popular subjects. For less popular subjects, the number of facts can be very low, like 5 or 10. # Requirements - If you don't know the subject at all, return an empty list. - If the subject is not a named entity, return an empty list. - Include at least one triple where predicate is "instanceOf". - Do not get too wordy. - Separate several objects into multiple triples with one object.
Input
Subject: Allais paradox Description of subject: The Allais paradox is a famous decision-making puzzle in behavioral economics that shows how people's choices under risk often violate the expected utility theory, revealing systematic inconsistencies in rational choice models.
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.
subject surface form:
Prospect theory