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JGWeissman comments on Is Rationality Maximization of Expected Value? - Less Wrong
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Maximize expected utility, not expected money.
Your intuitions in the examples that maximizing expected money is wrong is because you do not value money linearly on that scale.
What exactly does maximizing expected utility yield in these particular cases?
For one, I could be convinced not to take A (0.01 could be too risky) but I would never take B.
I feel that if maximization of expected utility involves averaging probabilities of outcomes weighted by payoffs, then it's going to suffer from similar difficulties.
Depends on how much money you currently have. According to the simple logarithmic model, you should take gamble B if your net worth is at least $2.8M.