This paper presents an application of the dual theory of choice under
uncertainty to the problem of asset diversification. It is shown that
when there are two or more risky assets, conditions which are sufficie
nt for expected-utility maximizers to diversify among n assets, are al
so sufficient for dual agents to do so. This result is in contrast to
the case of one risky and one safe asset in which dual agents invest a
ll their funds in only one of the assets, while expected-utility maxim
izers usually diversify.