The rational decision maker, when evaluating a risk or a benefit, is concerned with the absolute magnitude of that risk or benefit. A proportional change from an arbitrary baseline (a relative risk) is irrelevant. Here's an example that should bring this into keen focus.
If you are shopping and you find a 50% off sale, that's a great sale. Unless you're shopping for socks. At $0.99 a pair, you save $0.50 with that massive discount. Alternatively, if you come across a 3% sale, but it's at the Audi dealership, that paltry discount can save you $900 on a $30,000 Audi A4. Which discount should you spend the day pursuing? The discount rate mathematically obscures the value of the savings. If we framed the problem in terms of absolute savings, we would be better consumers. But retailers know that saying "50% OFF!" attracts more attention than "$0.50 OFF!" in the sock department. Likewise, car salesmen know that writing "$1000 BELOW INVOICE!" on the windshield looks a lot more attractive than "3% BELOW INVOICE!"
