Risk-averse persons sometimes prefer to play some gambles even if they know that those gambles are not fair, i.e., on average people lose by playing them. One plausible explanation for this seemingly paradoxical phenomenon is that:

A. Gambling has entertaining effects which are not treated explicitly as part of the payoffs.
B. People's actions are not reasonable.
C. The economic theory of uncertainty is not correct.
D. None of the statements is correct.


Answer: A

Economics

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