Moral Impossibility in the Petersburg Paradox : A Literature Survey and Experimental Evidence

Date: 2010
By: Tibor Neugebauer (Luxembourg School of Finance, University of Luxembourg)
URL: http://d.repec.org/n?u=RePEc:crf:wpaper:10-14&r=net
The Petersburg paradox has led to much thought for three centuries. This paper describes the paradox, discusses its resolutions advanced in the literature while alluding to the historical context, and presents experimental data. In particular, Bernoulli’s search for the level of moral impossibility in the Petersburg problem is stressed; beyond this level small probabilities are considered too unlikely to be relevant for judgment and decision making. In the experiment, the level of moral impossibility is elicited through variations of the gamble-length in the Petersburg gamble. Bernoulli’s conjecture that people neglect small probability events is supported by a statistical power analysis.
Keywords: Petersburg paradox; economic history; bounded rationality; significance level; experimental economics
JEL: B3

發表迴響

在下方填入你的資料或按右方圖示以社群網站登入:

WordPress.com 標誌

您的留言將使用 WordPress.com 帳號。 登出 /  變更 )

Google photo

您的留言將使用 Google 帳號。 登出 /  變更 )

Twitter picture

您的留言將使用 Twitter 帳號。 登出 /  變更 )

Facebook照片

您的留言將使用 Facebook 帳號。 登出 /  變更 )

連結到 %s