2013/01/01 by Aris Spanos, Spanos, Aris
Economics, Econometrics and Finance · #Economic Theory and Policy #Economic theories and models #FOS: Computer and information sciences #Methodology (stat.ME)
paper · pdf · doi:10.48550/arxiv.1301.0118
openalex publication_date 2013/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
The primary objective of this note is to revisit the two envelope problem and propose a simple resolution. It is argued that the paradox arises from the ambiguity associated with the money content x of the chosen envelope. When X=x is observed it is not know which one of the two events, X=θ or X=2θ, has occurred. Moreover, the money in the other envelope Y is not independent of X; when one contains θ the other contains 2θ. By taking these important features of the problem into account, the paradox disappears.