The St. Petersburg Paradox: When the Math Says Infinity

A coin-flipping game has a mathematically infinite average payout. So why are most people willing to pay only a modest amount to play? We explore the St. Petersburg paradox, where a straightforward probability calculation collides with everyday judgment about money and risk. The puzzle opens up questions about how we value wealth, weigh unlikely outcomes, and account for a house with limited funds. From expected utility to finite bankrolls, we examine why a theoretical average can leave so much out of a practical decision. Note: This podcast was AI-generated, and sometimes AI can make mistakes. Please double-check any critical information. Sponsored by Embersilk LLC