Advertisement

Paradox Lost pp 149-158 | Cite as

The Two Envelopes

  • Michael Huemer
Chapter

Abstract

You are given a choice between two indistinguishable envelopes, each containing money, one with twice as much as the other. It can be argued that each envelope has an expected value of 5/4 the value in the other envelope; thus, whichever envelope you have, you should prefer the other. The paradoxical reasoning confuses variables with constants. A correct analysis would assign a coherent probability distribution to each possible way of distributing money across the two envelopes. This leads to both envelopes having the same expected value.

References

  1. Clark, Michael. 2002. Paradoxes from A to Z. London: Routledge.Google Scholar
  2. Kraitchik, Maurice. 1942. Mathematical Recreations. New York: W.W. Norton.Google Scholar
  3. Thaler, Richard. 1980. “Toward a Positive Theory of Consumer Choice”, Journal of Economic Behavior and Organization 1: 39–60.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Michael Huemer
    • 1
  1. 1.Philosophy DepartmentUniversity of Colorado BoulderBoulderUSA

Personalised recommendations