This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: probability. The expected amount in the other envelope is then $50,500. The second son finds only $1,000 in his envelope. Again, he calculates that the expected amount of the other envelope is $5,050. The father privately asks each son whether he would be willing to pay $1 to switch envelopes. Both son say yes. The father then tells each son what his brother said and repeats the question. Again, both say yes. The father relays the brothers’ answers and ask each a third time. Again both say yes. But if the father relays the answer and ask a fourth time, the son with $1,000 will say yes, but the son with $10,000 will say no. Why?...
View
Full Document
 Spring '12
 Cheng
 Math, Game Theory, strategic form, following Kuhn tree

Click to edit the document details