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The Saint Petersburg Paradox and Its Solution

Author

Listed:
  • Claudio Mattalia

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

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.

Suggested Citation

  • Claudio Mattalia, 2025. "The Saint Petersburg Paradox and Its Solution," Risks, MDPI, vol. 13(2), pages 1-19, February.
    • Handle: RePEc:gam:jrisks:v:13:y:2025:i:2:p:32-:d:1588400
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    References listed on IDEAS

    as
    1. Gilbert W. Bassett, Jr., 1987. "The St. Petersburg Paradox and Bounded Utility," History of Political Economy, Duke University Press, vol. 19(4), pages 517-523, Winter.
    2. V. I. Yukalov, 2021. "A Resolution of St. Petersburg Paradox," Papers 2111.14635, arXiv.org.
    3. Yukalov, V.I., 2021. "A resolution of St. Petersburg paradox," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    4. Tibor Neugebauer, 2010. "Moral Impossibility in the Petersburg Paradox : A Literature Survey and Experimental Evidence," LSF Research Working Paper Series 10-14, Luxembourg School of Finance, University of Luxembourg.
    5. Christian Seidl, 2013. "The St. Petersburg Paradox at 300," Journal of Risk and Uncertainty, Springer, vol. 46(3), pages 247-264, June.
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