Question 4 Explain: The St Petersburg paradox demonstrates our natural risk aversion We become aware of the St Petersbur

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Question 4 Explain The St Petersburg Paradox Demonstrates Our Natural Risk Aversion We Become Aware Of The St Petersbur 1 (118.76 KiB) Viewed 13 times

Question 4 Explain: The St Petersburg paradox demonstrates our natural risk aversion We become aware of the St Petersburg paradox when we apply Blank 1 to the St Petersburg game because, on the one hand, EVR seems like a rational theory, but the calculation for the game gives the irrational seeming result that we ought to be willing to pay Blank 2 amount to play the St Petersburg game. The paradox can be Blank 3 by taking into account that our natural risk aversion would Blank 4 how our intuitive assessment of the rational amount to pay to play the game undervalues the riskier outcomes with a high value but low Blank 5 which are included in the calculated assessment of the rational amount to pay to play the game. Since having an aversion to risk would resolve the paradox the St. Petersburg paradox demonstrates our natural risk aversion. Words: amount, any, apply, assessment, aversion, aware, calculation, demonstrates, EVR, explain, game, high, included, intuitive, irrational, low, natural, ought, outcomes, paradox, pay, play, probability, rational, resolve, result, risk, seeming, theory, undervalues, value, willing Blank 1 Blank 2 Blank 3 Blank 4 Blank 5. Add your answer Add your answer Add your answer Add your answer Add your answer 1.25 Points Questions Filter (4) I