This post is forcing me to reconsider the post I was going to offer on risk-aversion, so I'll just leave it as a comment.

I suspect people will be more likely to act as if they understand expected payout if the situation appears as an iterated game. Consider the following two situations:

1. I offer you the choice of pushing a button or not. Pushing the button will give you $100,000 dollars with probability 0.9 and take from you $500,000 (or everything you own) with probability 0.1. This is a one-time deal. (Alternatively, the button either adds 5 years to your life with probability 0.9 or takes away 25 years with probability 0.1).

2. I offer you the same deal, except you know that you will the opportunity to push the button or not once per year every year for 10 years.

My hypothesis is that many more people would choose to push the button in scenario 2, and the would explicitly be doing something like calculating expected value over time. Whereas in situation 1, many will shy away from taking the risk, because being ruined permanently is a lot worse than gaining $100,000 once (which is basically risk aversion in the economic sense -- money does not have a linear relationship with utility, nor do years of life).