[ QUOTE ]
I tried explaining it as clearly as I could but it still couldn't convince her.
[/ QUOTE ] Maybe you should have used as evidence that anybody who buys insurance on anything is an idiot because insurance is the -EV choice. Oh wait...
If you understood this useful concept you'd see what your friend is talking about
:
http://en.wikipedia.org/wiki/Risk_aversion
Anybody who turns down any wager could be making their best EV decision depending on their money utility function. Even a 50/50 flip at 100:1 odds.