Expected value theory has been known for centuries to be subject to critique by St. Petersburg paradox arguments. And there is a traditional rebuttal of the critique that denies the empirical relevance of the paradox because of its apparent dependence on existence of credible offers to pay unbounded sums of money. Neither critique nor rebuttal focus on the question with empirical relevance: Do people make choices in bounded St. Petersburg games that are consistent with expected value theory? This paper reports an experiment that addresses that question.
Cox, James; Sadiraj, Vjollca; and Vogt, Bodo, "On the Empirical Relevance of St. Petersburg Lotteries" (2008). ExCEN Working Papers. 103.