| Article ID: | iaor20073856 |
| Country: | United States |
| Volume: | 51 |
| Issue: | 4 |
| Start Page Number: | 677 |
| End Page Number: | 678 |
| Publication Date: | Apr 2005 |
| Journal: | Management Science |
| Authors: | Blavatskyy Pavlo R. |
| Keywords: | paradoxical situation |
The conventional parameterizations of cumulative prospect theory do not explain the St. Petersburg paradox. To do so, the power coefficient of an individual's utility function must be lower than the power coefficient of an individual's probability weighting function.