Back to the St. Petersburg Paradox?

Pavlo R. Blavatskyy ()
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Pavlo R. Blavatskyy: Institute for Empirical Research in Economics, University of Zurich, Winterthurerstrasse 30, CH-8006 Zurich, Switzerland

Management Science, 2005, vol. 51, issue 4, 677-678

Abstract: The 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: expected utility theory; cumulative prospect theory; St. Petersburg paradox; power utility; probability weighting (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:51:y:2005:i:4:p:677-678

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