The Allais Paradox

The problem
Choice 1: A vs BA100%$1MB89%$1M10%$5M1%$0Choice 2: C vs DC: 11% chance of $1M, 89% chance $0 · D: 10% chance of $5M, 90% chance $0

Two choices. Pick one option from each.

Choice 1:

  • A. $1,000,000 guaranteed.
  • B. 89% chance of $1M, 10% chance of $5M, 1% chance of $0.

Choice 2:

  • C. 11% chance of $1M, 89% chance of $0.
  • D. 10% chance of $5M, 90% chance of $0.

Most people pick A and D. What's wrong with that?