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Harmonic sequence paradox

Blavatskyy, Pavlo

In: Economic Theory, 2006, vol. 28, no. 1, p. 221-226

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    Titel
    • Harmonic sequence paradox
    Autor
    • Blavatskyy, Pavlo. Institute for Empirical Research in Economics, University of Zurich, Winterthurerstrasse 30, 8006, Zurich, SWITZERLAND
    Dokumententyp
    • Postprint
    OAI-PMH-ID
    • oai:doc.rero.ch:315723
    Summary
    Summary.: 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