Proceedings of the Annual Meeting of the Cognitive Science Society

The St. Petersburg Paradox (SPP), where people are willing topay only a modest amount for a lottery with infinite expectedgain, has been a famous showcase of human (ir)rationality.Since inception multiple solutions have been proposed,including the influential expected utility theory. Criticismsremain due to the lack of a priori justification for the utilityfunction. Here we report a new solution to the long-standingparadox, which focuses on the probability weightingcomponent (rather than the value/utility component) incalculating the expected value of the game. We show that anew Additional Transition Time (AT) based measure,motivated by both physics and psychology, can naturally leadto a converging expected value and therefore solve theparadox.