"The reality is that most people implicitly choose an overall level of risk in their lives and optimize the apportionment of that risk among activities in a way

"The reality is that most people implicitly choose an overall level of risk in their lives and optimize the apportionment of that risk among activities in a way which maximizes their happiness." Do you have anything to support this? Most economic theories say that people make tradeoffs of time and money, but not risk. Risk is generally too nebulous a concept for an individual to make any kind of rational decisions about its allocation - we have no real concept of the risk we're incurring when driving a car or stepping on a plane (and generally, our gut feeling is wrong.)