Harmonic Sequence Paradox
Informal evidence suggests that individuals are willing to pay only a finite and, typically, very low price for a specific lottery that converges to an infinite payment with probability one. The established decision theories (expected value, expected utility theory, cumulative prospect theory) canno...
| Veröffentlicht in: | Economic Theory. - Springer, 1991. - 28(2006), 1, Seite 221-226 |
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| 1. Verfasser: | |
| Format: | Online-Aufsatz |
| Sprache: | English |
| Veröffentlicht: |
2006
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| Zugriff auf das übergeordnete Werk: | Economic Theory |
| Schlagworte: | Expected value EUT Cumulative prospect theory St. Petersburg paradox Willingness to pay C91 D81 Philosophy Behavioral sciences Mathematics |
| Zusammenfassung: | Informal evidence suggests that individuals are willing to pay only a finite and, typically, very low price for a specific lottery that converges to an infinite payment with probability one. The established decision theories (expected value, expected utility theory, cumulative prospect theory) cannot satisfactorily explain this low willingness to pay. The presented paradox strengthens the original and the super St. Petersburg paradox. |
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| ISSN: | 14320479 |