Envelope Paradox

number of trials

200

random number seed

51

switch to other envelope

keep original envelope

Imagine being presented with two envelopes. The first envelope contains anywhere between $5 to $20, and the other contains either half or double in value. Looking at the first envelope, you are given the option to keep it or switch to the second.

This problem is known as the exchange paradox. The Demonstration simulates the effectiveness of two different strategies: keeping the first envelope or switching to the second. The red data points represent the strategy of switching to the other envelope, and the blue data points represent keeping the original envelope. The

y

axis is the cumulative amount of money, and the

x

axis is the number of trials.