Time For A Solution – A Celebration of the Resolution of the St Petersburg Paradox

Monday 9 September 2013 was an important milestone in the history of financial mathematics: the 300th anniversary of the formulation of the St Petersburg Paradox by Nicolas Bernoulli. In 2011, after 298 years, the Royal Society published Ole Peters’ solution, which pointed out that the paradox arises from a confusion between time averaging and ensemble averaging. Ole’s solution provides the foundations for a decision theory where assumptions about psychological characteristics of individuals are replaced by information about dynamics, challenging much received wisdom in neoclassical economics.
A celebration of Ole’s work – organised by CISI in collaboration with Long Finance – was held at Gresham College and featured the première of a short film in which Ole explains his ideas. A distinguished panel debated the implications and concluding remarks were delivered by Alex Adamou.

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