Mathematics

Why You Should Not Pay For Infinite Wealth

Why You Should Not Pay For Infinite Wealth

A game can promise an infinite average payout, yet almost no one would pay more than a few dollars to play it. This mathematical mystery proves that humans value certainty far more than simple long-term averages.

In this coin-flipping game, your prize doubles with every heads flipped, making the potential math reach infinity. Despite this huge number, rational people refuse to bet large sums because the probability of winning big is astronomically low. Most participants prefer a small, guaranteed reward over a massive but unlikely windfall. This insight helped economists realize that value is subjective and based on risk rather than raw calculations.

Source: St. Petersburg paradox

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