However, some people are allergic to red wine, so they may choose the white wine, despite the difference in price. EV theory cannot account for people's choices, when they consider aspects of the alternatives other than the dollar value and the likelihood. And there are other aspects, such as a possible allergic reaction to the wine. Thus, EV theory was modified to Expected Utility theory, where the attributes to consider for each alternative are the utility that individual can get from the alternative, and the likelihood of getting that utility. Dollar value is one component of utility, but it is not the only component.
Utility involves more that just the price of the alternative.
C. Nevertheless, people like certain options, such as D, where the likelihood of getting something 1.0. This is known as the certainty effect , because people tend to prefer certain options over uncertain options. However, people tend prefer E to F. A bird in the hand is worth two in the bush. These results suggest that peole are risk averse , because they are avoiding the option that is uncertain, or the risky option. Most people will choose G in this case, because they want the opportunity to avoid a loss, even though it means risking a greater loss.