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Il paradosso di S. Pietroburgo, una rassegna

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  • Ruggero Paladini

    (Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici)

Abstract

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.

Suggested Citation

  • Ruggero Paladini, 2017. "Il paradosso di S. Pietroburgo, una rassegna," Public Finance Research Papers 29, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    • Handle: RePEc:gfe:pfrp00:00029
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    References listed on IDEAS

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    Cited by:

    1. Ruggero Paladini, 2020. "Is there a fair price in St. Petersburg repeated games? An empirical analysis," Public Finance Research Papers 44, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.

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    More about this item

    Keywords

    expected value; utility function; fractal distributions.;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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