On the Empirical Relevance of St. Petersburg Lotteries
8 Pages Posted: 16 Jan 2011
Date Written: January 1, 2011
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 finite 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
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Strong Evidence for Gender Differences in Investment
By Gary Charness and Uri Gneezy
-
Portfolio Choice and Risk Attitudes: An Experiment
By Gary Charness and Uri Gneezy
-
Myopic Loss Aversion: Information Feedback vs. Investment Flexibility
By Charles Bellemare, Michael U. Krause, ...
-
Does Binding of Feedback Influence Myopic Loss Aversion? An Experimental Analysis
By Martin Weber and Thomas Langer
-
Overconfidence in Investment Decisions: An Experimental Approach
By Dennis Alexis Valin Dittrich, Werner Güth, ...
-
A Domain-Specific Risk-Taking (DOSPERT) Scale for Adult Populations
By Ann-renee Blais and Elke U. Weber
-
Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior
By Matthias Sutter, Martin G. Kocher, ...