Back to the St. Petersburg Paradox?

Pavlo Blavatskyy

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: Conventional parameterizations of cumulative prospect theory do not explain the St. Petersburg paradox. To do so, the power coefficient of an individual's utility function must be lower than the power coefficient of an individual's probability weighting function.

Keywords: EUT; Cumulative prospect theory; St. Petersburg paradox; Power utility; Probability; Weighting. (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2004-07
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Citations: View citations in EconPapers (3)

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