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Simulating Daniel Bernoulli’s St. Petersburg game: Theoretical and empirical consistency

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  • Robert W. Vivian

    (University of the Witwatersrand)

Abstract

Russon and Chang simulated St. Petersburg games and found that their results were inconsistent with their theoretical predictions. In this article, the theoretical outcomes are derived this time using the methodology suggested by Daniel Bernoulli, and games are then simulated. When this is done, it is found that the theoretical and empirical results are consistent.

Suggested Citation

  • Robert W. Vivian, 2004. "Simulating Daniel Bernoulli’s St. Petersburg game: Theoretical and empirical consistency," Simulation & Gaming, , vol. 35(4), pages 499-504, December.
    • Handle: RePEc:sae:simgam:v:35:y:2004:i:4:p:499-504
    DOI: 10.1177/1046878104268733
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    References listed on IDEAS

    as
    1. Knut Aase, 2001. "On the St. Petersburg Paradox," Scandinavian Actuarial Journal, Taylor & Francis Journals, vol. 2001(1), pages 69-78.
    2. Schoemaker, Paul J H, 1982. "The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 529-563, June.
    3. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
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