Would you accept a gamble that offers a 10% chance to win $95 and a 90% chance to lose $5? Would you pay $5 to participate in a lottery that offers a 10% chance to win $100 and a 90% chance to win nothing? First, take a moment to convince yourself that the two problems are identical. In both of them you must decide whether to accept an uncertain prospect that will leave you either richer by $95 or poorer by $5. Someone whose preferences are reality-bound would give the same answer to both questions, but such individuals are rare. In fact, one version attracts many more positive answers: the
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