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  • Weirich 1984 The St. Petersburg Gamble and Risk

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    The St. Petersburg paradox shows that expected value alone does not determine a rational decision. While a fair coin-tossing game offers infinite expected value, most people would not pay a large finite sum to play. Decision theory must account for attitudes to risk and the declining marginal utility of money to explain rational choices under uncertainty.

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    The St. Petersburg paradox shows that expected value alone does not determine a rational decision. While a fair coin-tossing game offers infinite expected value, most people would not pay a large finite sum to play. Decision theory must account for attitudes to risk and the declining marginal utility of money to explain rational choices under uncertainty.

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    12 views10 pages

    Weirich 1984 The St. Petersburg Gamble and Risk

    Uploaded by

    otter
    The St. Petersburg paradox shows that expected value alone does not determine a rational decision. While a fair coin-tossing game offers infinite expected value, most people would not pay a large finite sum to play. Decision theory must account for attitudes to risk and the declining marginal utility of money to explain rational choices under uncertainty.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 10

    The St.

    Petersburg Gamble and Risk Weirich, Paul Theory and Decision; Sep 1, 1984; 17, 2; ProQuest pg. 193

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