The St. Petersburg Paradox
A coin-flipping game whose average winnings are infinite. How much of your own money would you actually pay to play?
1713 (posed by Nicolaus Bernoulli), 1738 (published by Daniel Bernoulli)19 min read
Ergodicity economics
Ole Peters
Physicist at the London Mathematical Laboratory and the Santa Fe Institute, and the leading advocate of "ergodicity economics". His 2011 paper argues that the St Petersburg paradox — and much of decision theory besides — arises from quietly substituting an average over parallel possible worlds for an average over time in a single world, two quantities that coincide only for ergodic processes. Wealth dynamics are not ergodic.