I love examples like this. My interpretation of this generally depends on an idea of "Expected Impact", where ex. the difference between $10^6 and $10^9 in term

I love examples like this. My interpretation of this generally depends on an idea of "Expected Impact", where ex. the difference between $10^6 and $10^9 in terms of lifestyle impact can be smaller than the difference between $10^3 and $10^6. You could assume a logarithmic value function, for example, but each person might have a different function depending on what you would do with the money. Not that people actually think that way, but you can construct a model where the guaranteed million is the rational choice.