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Putting Expectations in Order

Published online by Cambridge University Press:  01 January 2022

Abstract

In their paper, “Vexing Expectations,” Nover and Hájek (2004) present an allegedly paradoxical betting scenario which they call the Pasadena Game (PG). They argue that the silence of standard decision theory concerning the value of playing PG poses a serious problem. This paper provides a threefold response. First, I argue that the real problem is not that decision theory is “silent” concerning PG, but that it delivers multiple conflicting verdicts. Second, I offer a diagnosis of the problem based on the insight that standard decision theory is, rightly, sensitive to order. Third, I describe a new betting scenario—the Alternating St. Petersburg Game—which is genuinely paradoxical. Standard decision theory is silent on the value of playing this game even if restrictions are placed on the order in which the various alternative payoffs are summed.

Type
Bayesian Epistemology
Copyright
Copyright © The Philosophy of Science Association

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References

Hájek, Alan, and Nover, Harris (2004), “Vexing Expectations”, Vexing Expectations 113:237249.Google Scholar