The Saint Petersburg Paradox and Its Solution

Claudio Mattalia ()
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Claudio Mattalia: Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche (ESOMAS), University of Torino,10100 Torino, Italy

Risks, 2025, vol. 13, issue 2, 1-19

Abstract: This article describes the main historical facts concerning the Saint Petersburg paradox, the most important solutions proposed thus far, and the results of new experimental evidence and a simulation of the game that shed light on a solution for this paradox. The Saint Petersburg paradox has attracted the attention of important mathematicians and economists since it was first formulated 300 years ago, and it has strongly influenced the development of new concepts in the economic and social sciences. The main conclusion of this study is that the behavior of the individuals playing the game is not paradoxical at all, and the paradox is intrinsic to the game.

Keywords: games of chance; expected utility; computer simulation (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:13:y:2025:i:2:p:32-:d:1588400

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