Choose between the following two alternatives:
The Paradox is to determine which choice has the larger Expectation Value,
However, the best choice depends on the unknown amount, even though it is the same in both cases! This appears to violate the
- 1. 90% chance of an unknown amount and a 10% chance of $1 million, or
- 2. 89% chance of the same unknown amount , 10% chance of $2.5 million, and 1% chance of nothing.
See also Independence Axiom, Monty Hall Problem, Newcomb's Paradox
Allais, M. ``Le comportement de l'homme rationnel devant le risque: Critique des postulats et axiomes de l'école américaine.''
Econometrica 21, 503-546, 1953.
© 1996-9 Eric W. Weisstein