Vivian, Robert William (2003): Solving Daniel Bernoulli's St Petersburg Paradox: The Paradox which is not and never was. Published in: South African Journal of Economic & Management Sciences , Vol. 2, No. NS6 (2003): pp. 331345.

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Abstract
It has been accepted for over 270 years that the expected monetary value (EMV)of the St Petersburg game is infinite. Accepting this leads to a paradox; no reasonable person is prepared to pay the predicted large sum to play the game but will only pay, comparatively speaking, a very moderate amount. This paradox was 'solved' using cardinal utility. This article demonstrates that the EMV of the St Petersburg game is a function of the number ofgames played and is infmite only when an infinite number of games is played. Generally, the EMV is a very moderate amount, even when a large number of games is played. It is of the same order as people are prepared to offer to play the game. There is thus no paradox. Cardinal utility is not required to explain the behaviour of the reasonable person offering to play the game.
Item Type:  MPRA Paper 

Institution:  University of the Witwatersrand 
Original Title:  Solving Daniel Bernoulli's St Petersburg Paradox: The Paradox which is not and never was 
Language:  English 
Keywords:  St Petersburg paradox; St Petersburg game; expected utility; decision theory 
Subjects:  D  Microeconomics > D8  Information, Knowledge, and Uncertainty > D81  Criteria for DecisionMaking under Risk and Uncertainty 
Item ID:  5233 
Depositing User:  Robert W Vivian 
Date Deposited:  09. Oct 2007 
Last Modified:  07. Jan 2014 19:59 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/5233 