Mean vs. variance - which is dominant? I am currently trying to gain some basic understanding of the mean-variance tradeoff. However, since I do not have an economic education background, I am struggling with some issues. Currently I am wondering which of the two is the key driver for decision-making. Let's say I have option A with a low variance and a low expected value, and option B with a moderate variance and a moderate expected value - which of the two would people choose? Are we more attracted by increasing profit or by relatively lower risks? Or is there no general principle and it depends on individual preferences?

I appreciate any input on that! Thank you in advance.
There is no general principle. It depends on preferences. Especially the degree of risk aversion, i.e. the preference toward risk.

As you mention, there is a trade-off. If there would be a dominant factor, as your title asks, then there would be no trade-off, as the best decision would always be clear.