Considering the Pasadena “Paradox”

Abstract

Nover and Hájek (2004) suggested a variant of the St Petersburg game which they dubbed the Pasadena game. They hold that their game is more paradoxical than the St Petersburg game in several aspects. The purpose of this article is to demonstrate theoretically and to validate by simulation, that their game does not lead to a paradox at all, let alone in the St Petersburg game sense. Their game does not produce inconsistencies in decision theory.