John Kay describes a problem that involves a probability distribution that is not well-behaved.
This problem is real. Anyone who has changed jobs, bought a house or planned a merger has encountered a version of the two-box game; keep what you know, or go for an uncertain alternative. But familiar problems are not necessarily easy to model.
Of course, this is better known as the two envelopes problem, and there are other paradoxes in probability theory.
2 comments:
Last link does not seem to work but it is not hard to find other paradoxes by google. Do you have any particularly interesting ones in mind? My favourite is Simpson's Paradox but it is probably considered a paradox in Statistics.
Thanks for the correction. No particular favorites- don't know enough to be able to judge, but probability theory has some marvellous ones. :-)
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