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On the Empirical Relevance of St.Petersburg Lotteries

James Cox (), Vjollca Sadiraj () and Bodo Vogt

No 2008-05, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: Expected value theory has been known for centuries to be subject to critique by St. Petersburg paradox arguments. And there is a traditional rebuttal of the critique that denies the empirical relevance of the paradox because of its apparent dependence on existence of credible offers to pay unbounded sums of money. Neither critique nor rebuttal focus on the question with empirical relevance: Do people make choices in bounded St. Petersburg games that are consistent with expected value theory? This paper reports an experiment that addresses that question.

Keywords: St. Petersburg paradox; expected value theory; experiment (search for similar items in EconPapers)
Pages: 8
Date: 2008-12, Revised 2009-01
New Economics Papers: this item is included in nep-exp, nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

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http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2008-05.pdf First version, 2008 (application/pdf)
http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2009-05.pdf Revised version, 2009 (application/pdf)

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Journal Article: On the empirical relevance of st. petersburg lotteries (2009) Downloads
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