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bill comments on What Cost for Irrationality? - Less Wrong
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That's correct... kind of... but let's make things a bit clearer.
"Risk-averse" and "risk-loving" are shorthand words that describe someone's curve of utility against money. Risk-loving means the curve bulges downward ("convex"), risk-averse means the curve bulges upward ("concave"). You're just pointing out that the curve may be locally convex in the vicinity of the person's current wealth, but concave elsewhere. It is probably true that most people won't desire the extra million as much after they get their first billion. But if you have no opportunity to make huge bets, you may well be risk-loving on small bets without being ignorant or irrational.
Do you have any examples of real economic circumstances under which a sane person (someone who isn't solely concerned with maximizing the number of Porsches they own, e.g.) would have a convex utility/money curve?
(If there is a way to phrase this question so that it seems more curious and less confrontational, please assume that I said that instead.)
I read somewhere that the reason we don't see these people is that they all immediately go to Vegas, where they can easily acquire as many positive value deals as they want.