17 Dec
2003
17 Dec
'03
11:17 p.m.
From: IN%"ichudov@algebra.com" 11-DEC-1996 19:45:12.83
A good question. It is based on the theory that every person has a "utility" function in their mind. This function determines the "worth" of money and worthiness of risk.
If that function as a function of income is strictly concave
Except in the case of a consumer for whom the lower end is essentially no different than 0 - e.g., a minimum amount for survival - having a concave utility function for money (as opposed to less-convertible goods/services) is irrational. While I am in favor of allowing people to be irrational if they so desire, I am not in favor of governmental rules (e.g., coercive rules) being determined by irrationality. See my comments on emotion to Matt M. -Allen