The St. Petersburg paradox goes as follows. A fair coin is tossed repeatedly until it comes up heads. If the first heads appears on the nth toss, you win $2 n . First, show that the expected monetary value of this game is infinite (the paradox is that no one would actually pay a huge amount to play this game). Second, consider a possible resolution of the paradox: suppose your utility for money is given by a log 2 x b where x is the number of dollars you have. Suppose you start with 0 dollars, what is the expected utility of this game

a) attached below

b) 2a + b

Step-by-step explanation:

a) show that the expected monetary value of this game is infinite

Given that the probability of getting first head on nth toss = $2^n

attached below is the prove

b) what is the expected utility of this game

using the Logarithm ;

x = number of dollars you have

attached below is a detailed solution to the given problem

is there supposed to be a diagram or a graph for this one? ?

step-by-step explanation:

vertical asymptote .

horizontal asymptote .

step-by-step explanation:

given function is .

vertical asymptote is given by setting

denominator =0

when degree of numerator and denominator are same then divide first term of numerator by first term of denominator to get horizontal asymptote.