Let L=[x,p; y,1-p] denote the lottery that pays $x with probability p and $y with probability 1-p. Consider the utility function U(L)=min x, y.

This person prefers $x to any gamble that pays $x with probability p and $y with probability p-1. For example, this person prefers a penny to a 99.999999% chance of $1 trillion.

CLAIM: This example shows that Rabin's theorem does not assume a CARA utility function.

Proof that claim is false.

The person described has the following utility function:

f(0)=0

If x>0, then f(x)=k

The marginal utility of money is zero. This person's utility function violates Rabin's assumption that the utility function is monotonically increasing. It violates the assumption that it's concave.

If you were desperate to model the person's preferences within EU theory, you'd say f(x)=1-k^x where k is arbitrarily close to zero. That is, the person's preferences are close to being describable by a CARA utility function.

Conclusion:

The fact that a person with the utility function U(0)=0 and U(x)=k for x>0 would always reject a win G/lose L gamble is completely irrelevant to Rabin's theorem since it violates the assumptions of monotonicity and concavity.

But nice try.