A Resolution of St. Petersburg Paradox
Year: 2021
Type: preprint
Abstract: The St. Petersburg paradox is the oldest paradox in decision theory and has played a pivotal role in the introduction of increasing concave utility functions embodying risk aversion and decreasing marginal utility of gains. All attempts to resolve it have considered some variants of the original set-up, but the original paradox has remained unresolved, while the proposed variants have introduced new complications and problems. Here a rigorous mathematical resolution of the St. Petersburg paradox is suggested based on a probabilistic approach to decision theory.
Author: V. I. Yukalov
Institution: Joint Institute for Nuclear Research
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3217310225