Overloaded: How Every Aspect of Your Life is Influenced by Your Brain Chemicals

by Ginny Smith

Here is another gambling game: I have a fair coin, and I’m going to flip it. To start with, I’ll put £2 in the pot, but every time I flip a head, the amount in the pot doubles. The first time I flip tails, the game is over, and you get whatever is in the pot. So if I flipped tails the first time, you would get £2. If it’s the second flip, it would be £4, and so on. How much would you pay to play that game? This is called the St Petersburg Paradox and it was initially devised by mathematician Daniel Bernoulli in the eighteenth century. If you work out the expected value, it is infinite.2 But people won’t pay an infinite amount to play. In fact, they won’t pay much at all, which is why it was called a paradox – the theory just didn’t match up with real life.