Il paradosso di S. Pietroburgo, una rassegna
Ruggero Paladini ()
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Ruggero Paladini: UniversitaÌ€ Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici
No 29, Public Finance Research Papers from Istituto di Economia e Finanza, DSGE, Sapienza University of Rome
In 1738 Daniel Bernoulli presented for the first time a study with a functional relationship between utility and wealth. The goal was to provide a solution to a "curious" paradox on probability theory. Almost three centuries after the St. Petersburg paradox is still debated. Two strands of research can be identified: the first, both theoretically and with surveys, examines the reasons for the subjective behavior of a player who is not willing to offer, if not a modest sum, to play a game that has an infinite expected value. The second one is the analysis by computer simulations of a large number of games, where unexpected statistical distributions emerge. From all of the studies it turns out that not only players offer very modest figures, but also that no gambling house will ever offer a St. Petersburg game.
Keywords: expected value; utility function; fractal distributions. (search for similar items in EconPapers)
JEL-codes: C18 D81 (search for similar items in EconPapers)
Pages: 45 pages
New Economics Papers: this item is included in nep-his, nep-hpe, nep-ore and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:gfe:pfrp00:00029
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