Term
St. Petersburg paradox
A mathematical paradox about a bet with an infinite expected payoff. People still won't pay an infinite sum to play, because their real means are limited.
Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street, William Poundstone
Explained in
- Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street, William Poundstone
- A Philosophical Essay on Probabilities, Pierre-Simon Laplace
A later name for the game in which the prize doubles with each toss until the first heads: by the calculation of expectation the stake in it is infinite, while common sense does not advise staking even a little. The name comes from an article by Daniel Bernoulli printed in St. Petersburg.
- Against the Gods: The Remarkable Story of Risk, Peter L. Bernstein
A puzzle about a coin game whose average payoff is infinite, yet no one will pay much to play it. It is named after the journal of the academy in St. Petersburg, where Daniel Bernoulli's paper appeared in 1738.