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The Saint Petersburg Game: An Exposition of the Classical Treatment

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  • William H. Ruckle

Abstract

An early attempt to measure risk was the 1738 paper of Bernoulli in which he describes the well‐known Saint Petersburg paradox. Subsequent writers have considered this game to draw conclusions about the nature of risk or to test newly devised risk models. We analyze the paradox, evaluate various theories which have been advanced to resolve it, and briefly examine the implications of these theories on the wider area of risk analysis.

Suggested Citation

  • William H. Ruckle, 1981. "The Saint Petersburg Game: An Exposition of the Classical Treatment," Risk Analysis, John Wiley & Sons, vol. 1(4), pages 241-250, December.
    • Handle: RePEc:wly:riskan:v:1:y:1981:i:4:p:241-250
    DOI: 10.1111/j.1539-6924.1981.tb01424.x
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    References listed on IDEAS

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    1. Shapley, Lloyd S., 1977. "The St. Petersburg paradox: A con games?," Journal of Economic Theory, Elsevier, vol. 14(2), pages 439-442, April.
    2. Stanley Kaplan & B. John Garrick, 1981. "On The Quantitative Definition of Risk," Risk Analysis, John Wiley & Sons, vol. 1(1), pages 11-27, March.
    3. Brito, D. L., 1975. "Becker's theory of the allocation of time and the St. Petersburg Paradox," Journal of Economic Theory, Elsevier, vol. 10(1), pages 123-126, February.
    4. Shapley, Lloyd S., 1977. "Lotteries and menus: A comment on unbounded utilities," Journal of Economic Theory, Elsevier, vol. 14(2), pages 446-453, April.
    5. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56(4), pages 279-279.
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