What is the St. Petersburg Paradox? Briefly explain how expected utility theory can help solve the St. Petersburg Paradox.
Assignment Task 1. (a) What is the St. Petersburg Paradox? Briefly explain how expected utility theory can help solve the St. Petersburg Paradox. (b) Consider an expected utility-maximizing student, who cares only about their income. Cheating on their exam adds a given amount to their income, whether or not they are caught. Suppose, however, that …