Local Representativeness and the St. Petersburg Paradox by Kim Kaivanto

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Local Representativeness and the St. Petersburg Paradox

Author : Kim Kaivanto

Publisher : SSRN

Published : 2006

ISBN-10 :

ISBN-13 :

Number of Pages : 7 Pages

Language : en

Descriptions Local Representativeness and the St. Petersburg Paradox

In the context of coin tossing, the local representativeness effect gives rise to alternation bias, whereby negatively autocorrelated sequences are perceived as maximally random and the runs characteristic of unbiased memoryless Bernoulli processes are perceived as being excessively regular to be random. Thus as a consequence of the local representativeness effect, a negative subjective autocorrelation is associated with tosses of fair, memoryless coins. Given this negative subjective autocorrelation, the expected value of the St. Petersburg prospect is finite. Moreover, this expected value falls within the empirically-determined range of what people are typically willing to pay for the St. Petersburg gamble.

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Results Local Representativeness and the St. Petersburg Paradox

圣彼得堡悖论 - 维基百科，自由的百科全书 - 圣彼得堡悖论（St. Petersburg paradox）是决策论中的一个悖论，由尼古拉一世·伯努利提出。 1738年，丹尼尔·伯努利以效用理論來解答這個問題，因此形成預期效用理論。問題內容. 1730年代，数学家丹尼尔·伯努利的堂兄尼古拉一世·伯努利，在致法國數學家皮耶·黑蒙·德蒙馬特的信件中，提出一个問题：

Saint Petersburg paradox - Policonomics - The Saint Petersburg paradox, is a theoretical game used in economics, to represent a classical example were, by taking into account only the expected value as the only decision criterion, the decision maker will be misguided into an irrational decision. This paradox was presented and solved in Daniel Bernoulli 's "Commentarii Academiae

Local Representativeness and the St. Petersburg Paradox - Request PDF | Local Representativeness and the St. Petersburg Paradox | In the context of coin tossing, the local representativeness effect gives rise to alternation bias, whereby negatively

St. Petersburg paradox - Wikipedia - The St. Petersburg paradox or St. Petersburg lottery is a paradox involving the game of flipping a coin where the expected payoff of the theoretical lottery game approaches infinity but nevertheless seems to be worth only a very small amount to the participants. The St. Petersburg paradox is a situation where a naive decision criterion that takes only the expected value into account predicts a

Three Cheers—Psychological, Theoretical, Empirical—for Loss Aversion - Loss aversion can explain the St. Petersburg paradox without requiring concave utility, it has the correct psychological foundation, it is theoretically useful, and it is a parsimonious principle that can explain many puzzles. ... Local Representativeness and the St. Petersburg Paradox. Go to citation Crossref Google Scholar. How Do Intentions

St. Petersburg paradox | Psychology Wiki | Fandom - The St. Petersburg paradox is a classical situation where a naïve decision theory (which takes only the expected value into account) would recommend a course of action that no (real) rational person would be willing to take. The paradox can be resolved when the decision model is refined via the notion of marginal utility or by taking into

Resolution of the St. Petersburg paradox using Von Mises' axiom of - The St. Petersburg paradox represents one of the most important paradoxes in game theory. The classic solution used to solve uses special utility functions that implement the concept of marginal utility [1], [2], [3]. This type of approach has been strongly criticized in virtue of the fact that utility functions attempt to formalize

Alternation Bias and the Parameterization of Cumulative ... - Springer - These authors show that direct application of CPT to the St. Petersburg gamble fails to resolve the paradox under most conventional CPT parameterizations. They also propose a number of remedial fixes to CPT, central among which is a constraint on the value function exponent to be smaller than the probability weighting function exponent (α < γ)

A Resource-Rational, Process-Level Account of the St. Petersburg Paradox - The St. Petersburg paradox is a centuries-old philosophical puzzle concerning a lottery with infinite expected payoff for which people are only willing to pay a small amount to play. Despite many attempts and several proposals, no generally accepted resolution is yet at hand. In this work, we present the first resource-rational, process-level

Get Access Local Representativeness and the St. Petersburg Paradox by - Local Representativeness and the St. Petersburg Paradox Summary In the context of coin tossing, the local representativeness effect gives rise to alternation bias, whereby negatively autocorrelated sequences are perceived as maximally random and the runs characteristic of unbiased memoryless Bernoulli processes are perceived as being

PDF - prospect theory (CPT) fail to resolve the St. Petersburg Paradox. Yet as a descriptive theory CPT is not intended to account for the local representativeness eﬁect, which is known to induce 'alternation bias' on binary iid sequences such as those generated by coin tossing in St. Petersburg gambles

Back to the St. Petersburg Paradox? | Management Science - INFORMS - The conventional parameterizations of cumulative prospect theory do not explain the St. Petersburg paradox. To do so, the power coefficient of an individual's utility function must be lower than the power coefficient of an individual's probability weighting function. ... Local Representativeness and the St. Petersburg Paradox. SSRN

What Is the St. Petersburg Paradox? - ThoughtCo - What Is the St. Petersburg Paradox? You're on the streets of St. Petersburg, Russia, and an old man proposes the following game. He flips a coin (and will borrow one of yours if you don't trust that his is a fair one). If it lands tails up then you lose and the game is over. If the coin lands heads up then you win one ruble and the game

St. Petersburg paradox | mathematics | Britannica - Other articles where St. Petersburg paradox is discussed: probability and statistics: Probability as the logic of uncertainty: …and made famous as the St. Petersburg paradox, involved a bet with an exponentially increasing payoff. A fair coin is to be tossed until the first time it comes up heads. If it comes up heads on the first toss, the payment is 2 ducats; if the first time it…

What is the Saint Petersburg Paradox? (Philosophy of Economics) - This video describes Bernoulli's paradox for probabilistic theories of rational choice in the philosophy of economics and rationality. It looks at the

Psyc 4030 exam 1 Flashcards | Quizlet - Solved the St. Petersburg Paradox with a concept called Utility and changed expected value to expected utility. ... local representativeness. People expect that a sequence of events generated by a random process will represent the essential characteristics of that process even when the sequence is short EX: In poker, it is the same rareness of

상트페테르부르크의 역설 - 위키백과, 우리 모두의 백과사전 - 상트페테르부르크의 역설(St. Petersburg paradox) 또는 세인트 피터스버그의 역설은 경제학에서 사람들의 의사결정에 기댓값이 가지는 의미의 차이에서 발생하는 역설을 말한다.니콜라우스 베르누이 1세(Nicolaus 1 Bernoulli)에 의해 제기되었으며, 흔히 사람들은 기댓값을 의사결정의 지표로 삼는다고

PSYC 4030 Exam 1 Flashcards | Quizlet - On average people will pay _____ to play St. Petersburg Paradox. $3.50. Math & Logic say you should pay _____ to play St. Petersburg. every penny you have. There are_____ possibilities of outcomes for St. Petersburg Paradox. ... - Local Representativeness - Gamblers Fallacy

Local Representativeness and the St. Petersburg Paradox - Abstract. In the context of coin tossing, the local representativeness effect gives rise to alternation bias, whereby negatively autocorrelated sequences are perceived as maximally random and the runs characteristic of unbiased memoryless Bernoulli processes are perceived as being excessively regular to be random. Thus as a consequence of the

The St. Petersburg Paradox - Stanford Encyclopedia of Philosophy - It continues to be a reliable source for new puzzles and insights in decision theory. The standard version of the St. Petersburg paradox is derived from the St. Petersburg game, which is played as follows: A fair coin is flipped until it comes up heads the first time. At that point the player wins \ (\$2^n,\) where n is the number of times the

サンクトペテルブルクのパラドックス - Wikipedia - サンクトペテルブルクのパラドックス (St. Petersburg paradox) は、意思決定理論におけるパラドックスの一つである。極めて少ない確率で極めて大きな利益が得られるような事例では、期待値が発散する場合があるが、このようなときに生まれる逆説である。

PDF The mean, the median, and the St. Petersburg paradox - The St. Petersburg Paradox is a famous economic and philosophical puzzle that has generated numerous conﬂicting explanations. To shed empirical light on this phenomenon, we examined subjects' bids for one St. Petersburg gamble with a real monetary payment. We found that bids were typically lower than twice the smallest payoff, and thus much

Back to the St. Petersburg Paradox? | Management Science - The conventional parameterizations of cumulative prospect theory do not explain the St. Petersburg paradox. To do so, the power coefficient of an individual's utility function must be lower than the power coefficient of an individual's probability weighting function. ... Local Representativeness and the St. Petersburg Paradox. SSRN

St. Petersburg Paradox and Failure Probability - PubMed - The St. Petersburg paradox provides a simple paradigm for systems that show sensitivity to rare events. Here, we demonstrate a physical realization of this paradox using tensile fracture, experimentally verifying for six decades of spatial and temporal data and two different materials that the fracture force depends logarithmically on the length of the fiber

Back to the St. Petersburg Paradox? - ResearchGate - The St. Petersburg paradox is the oldest paradox in decision theory and has played a pivotal role in the introduction of increasing concave utility functions embodying risk aversion and decreasing

PDF Local Representativeness and the St. Petersburg Paradox - Modern expositions of the St. Petersburg Paradox often specify the payoﬁ as y = 2n~ dollars. Maintaining the assumption that w = 0, this gamble is evaluated as E[u(~y)] = P1 ... (2002) on local representativeness and in-sights derived from Booth (2003) on the eﬁect of serial correlation on mathematical expectation

Local Representativeness and the St. Petersburg Paradox - In the context of coin tossing, the local representativeness effect gives rise to alternation bias, whereby negatively autocorrelated sequences are perceived as maximally random and the runs characteristic of unbiased memoryless Bernoulli processes are perceived as being excessively regular to be random. Thus as a consequence of the local representativeness effect, a negative subjective

The St. Petersburg Paradox (Simple Example + Explanation) - Using the ergodic solution to the St. Petersburg Paradox rather than the utility solution leads to the opposite conclusion. If your goal is long term growth, it never makes sense to bet more than 100% Kelly. Consider this simulated example of a bet using 100% Kelly, half (50%) Kelly, and twice (200%) Kelly

[eBook] the st petersburg paradox PDF Download - Author: Simon D. A. Sullivan Publisher: Size: 76.62 MB Format: PDF, Docs Category : Eighteenth century Languages : en Pages : 12 Access tag: The St Petersburg Paradox book download free, The St Petersburg Paradox book download in PDF, The St Petersburg Paradox epub books download free, book download online, The St Petersburg Paradox ebook download, download The St Petersburg Paradox ebook, The

The St. Petersburg Paradox - Stanford Encyclopedia of Philosophy - What is the St Petersburg paradox?

Back to the St. Petersburg Paradox? | Management Science - The St. Petersburg paradox despite risk-seeking preferences: an experimental study 26 October 2018 | Business Research, Vol. 12, No. 1 Key to Effective Organizational Performance Management Lies at the Intersection of Paradox Theory and Stakeholder Theory

The St. Petersburg Paradox - Stanford Encyclopedia of Philosophy - The St. Petersburg paradox is named after one of the leadingscientific journals of the eighteenth century, CommentariiAcademiae Scientiarum Imperialis Petropolitanae [Papers ofthe Imperial Academy of Sciences in Petersburg], in which DanielBernoulli (1700–1782) published a paper entitled “SpecimenTheoriae Novae de Mensura Sortis” [“Exposition of a

Local Representativeness and the St. Petersburg Paradox - Local Representativeness and the St. Petersburg Paradox⁄ Kim Kaivantoyz Department of Economics Lancaster University Management School Lancaster LA1 4YX, UK this version: January 20, 2006 Abstract In the context of coin tossing, the local representativeness eﬁect gives rise to alternation

PSYC 4030 Exam 1 Flashcards | Quizlet - On average people will pay _____ to play St. Petersburg Paradox. $3.50. ... Local Representativeness. Based on people's misbelief that chance is mis-corrected