Experts, Novices, and the St. Petersburg paradox: Is one solution enough?

William P. Bottom, Robert N. Bontempo, David R Holtgrave

Research output: Contribution to journalArticle

Abstract

Although the controversy over the correct solution to the St. Petersburg paradox continues in the decision making literature, few of the solutions have been empirically evaluated. Via the development of alternative versions of the St. Petersburg game, we were able to empirically test some of these solutions. Experts and novices behaved in accordance with Treisman's expectation heuristic when bidding for the right to play the various versions of the St. Petersburg game. When subjects were asked their preferences among the game versions. novices continued to behave in accordance with the expectation heuristic but a plurality of experts seemed to follow another strategy. This preference reversal and its implications and possible causes are thoroughly discussed. An alternative theory which mimicks the expectation heuristic is considered, and generalizations of the expectation heuristic and the St. Petersburg Paradox for z‐sided 'coins' (where z is any integer greater than or equal to 2) are presented. It appears that no one solution is yet rich enough for the St. Petersburg paradox.

Original languageEnglish (US)
Pages (from-to)139-147
Number of pages9
JournalJournal of Behavioral Decision Making
Volume2
Issue number3
DOIs
StatePublished - 1989
Externally publishedYes

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heuristics
expert
Numismatics
Decision Making
decision making
cause
Heuristics
Novice
Paradox
St. Petersburg paradox

Keywords

  • Expert/Novice Differences
  • Heuristics
  • St. Petersburg Paradox

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Sociology and Political Science
  • Strategy and Management

Cite this

Experts, Novices, and the St. Petersburg paradox : Is one solution enough? / Bottom, William P.; Bontempo, Robert N.; Holtgrave, David R.

In: Journal of Behavioral Decision Making, Vol. 2, No. 3, 1989, p. 139-147.

Research output: Contribution to journalArticle

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