Sirwin
Sirwin

An interesting paradox that suggests that aspects of life may not "work" as one believes.

By stevea68 | SteveA | 20 Dec 2020


I feel like I've resolved most all of it, but not completely and it's still quite unintuitive to me and it would likely apply to many investing in cryptocurrencies, though it applies to potentially many areas of life.

I'll simply paraphrase it like this - you've won a monetary prize to collect whatever is in one of two envelopes.  You can select an envelope and look at how much money is in it and then decide to take the second envelope (unforeseen) if you'd like.

You're also informed that one envelope contains 10 times as much as the other.

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So now, let's say you pick an envelope and it contains $100 in it.  Should you keep it or take what's in the other envelope?

Well, with a bit of thinking it seems that the other envelope should either be the one 10 times as much or you already have the one with 10 times the other.

Seeing as the initial selection of an envelope would appear to be an uninformed 50/50 chance, then the alternate envelope should contain either $10 or $1000 dollars.

If you average the amount in the alternate envelope that would be (10+1000)/2 = $505 dollars and it appears you should always pick the other envelope to, on average, earn $505-$100=$405.

What's even more strange is that almost anything with a difference in value could be expressed as a non 0% change.

I've figured out quite a bit of this but still haven't resolved it completely and truly don't think someone else will be able to give me an "ah ha!" insight, but I wanted to toss this out for a possible insight for others.

How do you rate this article?

6


stevea68
stevea68

I'm a semi-retired engineer looking for some ways of earning a little on the side and using cryptocurrencies seems like a good way of doing it :)


SteveA
SteveA

I'm limited to 510 characters for a description, so I'll waste a few making that comment. What else? There's a ton - are Big Bang and Cyclic Universe theories logical illusions? What forms of mathematics create beauty? Coffee, tea or a chocolate bar? ... or maybe what would an ideal partnership with someone be like? I'm both a "couch surfer" and explorer ... where might you like to go? I'm wishing us all the best.

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