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The time resolution of the St Petersburg paradox

A resolution of the St Petersburg paradox is presented. In contrast to the standard resolution, utility is not required. Instead, the time-average performance of the lottery is computed. The final result can be phrased mathematically identically to Daniel Bernoulli's resolution, which uses loga...

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Detalles Bibliográficos
Autor principal: Peters, Ole
Formato: Online Artículo Texto
Lenguaje:English
Publicado: The Royal Society Publishing 2011
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3270388/
https://www.ncbi.nlm.nih.gov/pubmed/22042904
http://dx.doi.org/10.1098/rsta.2011.0065
Descripción
Sumario:A resolution of the St Petersburg paradox is presented. In contrast to the standard resolution, utility is not required. Instead, the time-average performance of the lottery is computed. The final result can be phrased mathematically identically to Daniel Bernoulli's resolution, which uses logarithmic utility, but is derived using a conceptually different argument. The advantage of the time resolution is the elimination of arbitrary utility functions.