The St. Petersburg Paradox

An infinitely valuable game?

An interactive lesson with 6 steps, about 5 minutes: you predict, drag and solve, with instant feedback on every answer. It runs in your browser and needs JavaScript.

What you’ll learn

• The St. Petersburg game has infinite expected value, yet is worth little to anyone.
• Any real limit on payouts makes its value modest (about £30 for a £1 billion bank).
• Bernoulli resolved it with utility: money’s value grows more slowly than the amount.

Steps

1. Doubling pot
2. One term
3. An endless sum
4. A billionaire casino
5. More than £64?
6. Bernoulli’s resolution