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Puzzles|Views: 57|Likes: 0

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https://www.scribd.com/doc/45884230/Puzzles

12/25/2010

text

original

Florin Bidian

∗

November 15, 2009

Contents

1 Probability Puzzles 1.1 Polya’s urn and beta distributions . . . . . . . . . . . . . . 1.2 A Lewis Carrol’s absurdity . . . . . . . . . . . . . . . . . . 1.3 Borel’s paradox . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 Occurence of sequence patterns in coin tosses . . . . . . . . 1.5 Unrealiable witness . . . . . . . . . . . . . . . . . . . . . . . 1.6 Family probability . . . . . . . . . . . . . . . . . . . . . . . 1.7 Riding the brokerage account . . . . . . . . . . . . . . . . . 1.8 Guaranteed positive return . . . . . . . . . . . . . . . . . . 1.9 Rolling all 6 sides of a dice . . . . . . . . . . . . . . . . . . 1.10 The other side of the coin (related to Monty Hall problem) 1.11 One Seat Left. Is It Yours? . . . . . . . . . . . . . . . . . . 1.12 The envelope paradox . . . . . . . . . . . . . . . . . . . . . 1.13 Being average means you are obese . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 4 4 5 5 6 7 8 8 9 10 11 14

2 Other puzzles 14 2.1 Wine in water and viceversa . . . . . . . . . . . . . . . . . . . 14 2.2 Mind blowing party combinatorics . . . . . . . . . . . . . . . 15

1

1.1

Probability Puzzles

Polya’s urn and beta distributions

Problem 1. We succesively draw one ball from an urn containing black (denoted by 0) and white (denoted by 1) balls. At each draw we put back in

∗

University of Minnesota. E-mail: bidi0004@umn.edu

1

Et Zt+1 = Yt0 Yt0 + 1 Y1 Y0 + 1 t 0 1 t0 = Yt0 Yt1 + Yt0 = Zt . who considers only the case in which initially the urn contains one white and one black ball. This shows that the sequence {X1 .g) P [X1 = x1 . I map the names {black. Xn = xn ] = α(0)[ n i=1 δxi (0)] · α(1)[ α(X )[t] n i=1 δxi (1)] . that 1 Zt is distributed as a “uniform” variable. where δi (j) = 1 if j = 1 and is zero otherwise (Dirac measure at i). 1) it is easy to see..} is exchangeable. it is easy to see. Xπn (n) = xn ].the urn the extracted ball and an additional identically colored ball. . 1} be the color of the ball extracted at draw t. where α is interpreted as a measure on X . It will follow easily then that the t+2 limiting distribution of Zt is uniform on [0. . α(1)) = (1. . . concretely it puts probability t+1 1 on each point in the set { t+2 . . Xn . . 1]. Clearly Ytj := α(j) + t δXn (j) represents the number of balls n=1 of color j ∈ {0. 2 . α(1) := y. and in L1 (have not checked but very unlikely not to be a uniform integrable martingale sequence).s. This implies that Yt1 + Yt0 = t + α(0) + α(1). by induction. Xn−1 ) = α(j) + n−1 i=1 δXi (j) α(X ) . . . . by analyzing the tree process. white} into {0. . that the distribution of balls at each draw in the urn is uniform. t+1 }. In this particular case.Let α(0) := x. α := (α(0). . . . . . if we start with x black balls and y white balls? This puzzle is a generalization of the “magnetic dollars” puzzle in Winkler (2004). 1} after extraction t. . We want to ﬁnd the general answer for arbitrary starting number of balls of each color (even non-integer). . For (α(0). . . . . The general case is much harder. Thus the ﬁnite dimensional distribution are after rearranging (convince yourself by analyzing the case n=4. What happens in the limit with the fraction of white balls. and thus α(X ) = α(0) + α(1). This process is a martingale. . . Let Zt := Yt0 /(Yt1 + Yt0 ) be the fraction of black balls. (m + n − 1) represents the ascending factorial. Indeed.1 Thus we 1 This means that P [X1 = x1 . Yt1 + Yt0 Yt1 + Yt0 + 1 Yt + Yt Yt + Yt + 1 So indeed we know that it will converge a. Notice that the conditional distributions are given by P (Xn = j|X1 . α(1)) and Xt ∈ X := {0. e. . . Xn = xn ] = P [Xπn (1) = x1 . . . . (1) where m[n] := m(m + 1) . . 1} (in this order). For simplicity.

. α + P (X1 . . Γ(α(0))Γ(α(1)) (4) To verify this conjecture. . . 1 where we used (1) through (4). Zn = n + α(X ) This means that the limiting distribution of {Zn } is the distribution of Θ. . . . or the prior Beta(α). 3 . Xn = xn ) = [0. we see P (θ|X1 . . . . . P (X1 = x1 . .1] n 1 δxi (0) (1 − θ) n 1 δxi (1) . which is characterized by the density f (x. . which means that there is a unique distribution Θ on [0. . The general result is a bit surprising as one might have expected a linear density. . 1] (a prior) such that for X1 . Xn = xn ) = Γ [(α + Γ(α(X )) Γ(α(0))Γ(α(1)) n 1 δxi )(0)] Γ [(α + Γ(α(X ) + n) n 1 δxi )(1)] . in this case? Forcing the notation (by calling probability of a point the density at that point). . . . α(0) + n δXi (0) 1 → θ. What are posterior distributions. .can apply de Finetti’s theorem. we plug this density in (3) and use (2) to get P (X1 = x1 . are iid Bernoulli taking value 0 with probability θ and 1 with probability 1−θ. by the LLN. (3) We conjecture that the prior Θ is the Beta(α(0). . . . Xn ) = P (X1 . . . ∀x ∈ [0. Xn = xn |Θ = θ)dΘ(θ). the case studied directly is conﬁrmed. . . 1]. . Xn |θ)P (θ) = f (θ. Xn ) n δXi ). Xn = xn |Θ = θ) = θ and P (X1 = x1 . Since Beta(1. 1]. In other words. α) = Γ(α(0) + α(1)) α(0)−1 x (1 − x)α(1)−1 . n. conditional on Θ = θ. . α(1)) distribution. . . . as a generalization of the uniform distribution. (2) P (X1 = x1 . for all n and any permutation π n on 1. which. 1) is the uniform distribution on [0. . remembering that Γ(k) := (k − 1)! amounts to exactly expression (1). X2 . What is the connection between the posteriors (prior being trivially a posterior) and the limiting distribution of the fraction of balls of each color? Notice that conditional on Θ = θ. . . .

1. omitting the 4-th state WWW) is 1/3. supposing its form is a sphere). But with 3 balls in the urn. the distribution of latitude is non-uniform (it is proportional 4 . the state WWW would have been also possible. In an urn with no additional information.. but rather the conditional probability of extracting a red ball knowing that the urn contains at least one red ball. p. But then it means that initially there were 1 red and 1 white ball . Thus despite the equator and (e. but given a longitude.68) Problem 2. it must be the case that there are 2 red and 1 white balls in the urn. Hence the 2/3 probability does not signify that two balls will be red.g. or calculate it as 1 · 3 + 2 · 1 + 1 · 1 = 3 . Hence the probability of extracting a red ball is 2/3 (either count the frequency of R vs W in the 1 2 states.65) Problem 3. the conditional distributions (conditional on being on one of those circles) diﬀer. p. Let a random point be chosen uniformly on the surface of a sphere (e.) the Greenwich meridian being big circles and seemingly playing a symmetric role. that can be red or white. The position of a point is generally given by its longitude and latitude. Add one red ball to the urn. the distribution of the longitude is uniform. Thus the composition of the urn is one of the following: RRR. thus the probability that the original urn had the RW composition is 1/3 rather than 1.3 Borel’s paradox Szekely (1986.RWR. and a probability of extracting a red ball equal to 2/3. where we used P (B) = 3 3 3 3 i P (B|Ai ) · P (Ai ) if Ai are disjoint and cover the whole space (the three states in our case).WWR (equally probable states).e. The computed 2/3 probability is NOT the unconditional probability of extracting a red ball from an urn with three balls of unknown colors. on the Earth. Where is the error in the reasoning? It is quite subtle. Given a latitude.ABSURD. so the unconditional probability of extracting a red would have been 1/2. Consider an urn containing two balls.2 A Lewis Carrol’s absurdity Szekely (1986.1. Notice that the probability of the event RRW given the existence of a red ball (i.g. and the reasoning breaks down when inferring from the probability of extracting a red from an urn with partially known composition the frequency of red balls in the urn as if no information would have been available.

and sequences HH . let Mi be the expected number of tosses until HH occurs.4 Occurence of sequence patterns in coin tosses Szekely (1986. When calculating conditional probabilities. X2 = T ) . respectively “false”). They lie with the probability of 2/3. one should take into account the fact that while the equator is surrounded by spherical zones (rings). In a sequence of coin tosses. The inhabitants of an island tell truth one third of the time. Indeed. p. thus MH + MT = 4. Notice that MH = 1 + (1 + MT )/2 and MT = 1 + (MH + MT )/2.with the cosine of the latitude). for i ∈ {H. a meridian is surrounded by biangles (the shape of the peel of an apple slice). Let X the random variable representing the veracity of the statement. thus we need to compute P (X = T |X1 = T. 1.55-57) Problem 4. hence the average expected time until HH appears is (MH + MT )/2 = 6. Thus MH = 3 and MT = 5. H have the the longest average times to occurrence. . X2 with values in {T. the pattern HH appears after 6 tosses on average. after one of them made a statement. We know that both agents declare the statement true. Surprisingly though. let Mi be the expected number of tosses until HT occurs. 2n+1 − 2. We obtain MH = 5 and MT = 7. given that i occurred in the ﬁrst toss (including this ﬁrst toss). which pattern will occur ﬁrst: HH or HT? It is clear that the probabilities of one pattern occurring before the other are equal. X1 = T. another fellow stepped forward and declared the statement true. X2 = T ) = 5 P (X = T. X2 = T ) P (X1 = T. . On an occasion. 2n . What is the probability that it was indeed true? We can think at the agents 1 and 2’s pronouncements as random variables X1 . . It can be shown that n-length sequences HH . . 1. Thus MH = 1 + (1 + MH )/2 and MT = 1 + (MH + MT )/2. again taking values as true/false. HT occur on average after the shortest number of tosses. given that i occurred in the ﬁrst toss. while the pattern HT appears after only 4 tosses. T }. Similarly. F } (“true”.5 Unrealiable witness Winkler (2004) Problem 5.

Clearly 2E(X 2 ) = 2 n n n(n + 1) + ( )2 = = E[(n + 1)X]. X2 = T ) = P (X1 . if each family is trying to have a male son. a woman is not counted when looking at the rest of her sisters.1/2). However this does not take into account the distribution of male and female siblings in a family of given size. while the expected number of women’s sisters is E[X(X − 1)]. What makes it counterintuitive is that for example. To prove that the two are equal. for example. males have zero female siblings while females have n(n − 1) siblings.Notice that P (X.1/2) disttribution. Assuming that the these number of families is large.1/2) distribution. 332 332 92 Thus the required probability is 1/5. 1. But X is the sum of n independent Bernoulli variables with mean 1/2 and variance 1/4. X2 = T |X = T )·P (X = T ) = Also P (X1 . so it seems that this puts at a disadvantage the number of sisters that women have when compared to men. 6 . for evenly balanced families. X2 = T ) = 111 221 51 + = . assuming that the family sizes are chosen and strategized upon. For some family componence men are at a disadvantage. the expected number of men’s sisters equal the number of women’s sisters. Do men have more sisters than women? The answer is: the same. X1 . 4 2 2 Thus for a randomly chosen family.6 Family probability Problem 6. X2 = T |X = i)·P (X = i) = i∈{T. and assuming that each family distribution is an independent draw from the Binomial(n. 3 3 2 9 2 P (X1 . Assume that X is a random variable with the Binomial(n. Thus the expected number of men’s sisters are E[X(n − X)]. For example for unisex families of size n. and stops after having one.F } 1 1 1 1 1 · · = · . Let us consider a random family with n siblings. we just need to prove that 2E(X 2 ) = E[(n + 1)X]. as in China. It would be interesting to pursue further the problem. then Glivenko-Cantelli implies that fraction of families with k male siblings is equal to the probability of having k male siblings under a Binomial(n.

Let wt be the wealth of the agent.7 Riding the brokerage account Problem 7. and then pass to the limit. However you invest in the stock through a brokerage account that allows to borrow an extra 50% of your wealth. 7 . We know that pt θt+1 + bt+1 = pt θt + bt . one would write this problem in continuous time and obtain the solution directly. Thus 2 we obtain pt pt wt+1 + 1 − bt+1 = wt . Clearly wt = pt θt + bt . pt the price process. If the asset price would increase by a factor k instead of doubling. The assumption of constant growth in prices should not be relevant. Thus 2 wt+1 = 3 pt+1 1 − 2 pt 2 wt . . b0 = 0. θ0 = 0. . We need to compute n→∞ lim 3 a 1 en − 2 2 n Notice that using L’Hopital. . if you exploit the allowed leverage at the maximum? I will assume that trading occurs at ﬁnite intervals at the beginning. then the result would be k 3/2 .1. 1 2 n Assume that the t ∈ { n . ln( 3 eax − 1 ) 3 2 2 = a. bt the amount borrowed and θt the number of shares of stock one enters period t with. . Assume that you have one dollar two invest in a stock that will double in value in one year and it will never experience a price decrease. Assume that the rate of price appreciation a is constant (a = ln 2). with bt+1 ≥ − 1 wt (and smaller than zero) and w0 = 1. What is your terminal wealth. Even better. x→0 x 2 lim Thus the required limit is e3a/2 = 23/2 . pt+1 pt+1 or pt+1 pt+1 wt − − 1 bt+1 wt+1 = pt pt Since the price is monotonically increasing. since one can work with the usual tricks on Rieman sums. the borrowing limit will be maxed out and hence bt+1 = − 1 wt . n }. n .

7 rolls etc is horrendous and unmanageable. y0 ) = (y0 . ∀(x. y) : xy ≥ x0 y0 } is convex.9 Rolling all 6 sides of a dice Winkler (2004) Problem 9. Here I oﬀer a couple of clear solutions. What is the expected number of rolls until you see all six faces of a dice? The direct approach.8 Guaranteed positive return Problem 8. Thus E(Yi ) = E(Yi−1 ) + Since E(Y1 ) = 6 . Notice that E(Yi ) = E[E(Yi |Yi−1 )] = E[Yi−1 + E(Yi − Yi−1 |Yi−1 )] Notice that E(Yi − Yi−1 |Yi−1 ) = 6 . Let Yi denote the number of rolls until i distinct faces are observed. b) = f (x0 . We need to compute E(Y6 ). The set A := {(x. where p is the probability of success in a single experiment. x0 ).7 1 2 3 4 5 6 8 6 . thus there is a support hyperplane (a. Solution 1. You know for sure that the product of the prices of two stocks at the end of the year are going to be higher then their product now. Letting f (x. computing the probabilities of seeing the faces in 6 rolls. with i ≤ 6. since f is diﬀerentiable it follows that (a. y) ∈ A. y0 ). it follows that 6 E(Y6 ) = 6 6 6 6 6 6 + + + + + = 14. 1. There is also the solution in Winkler’s (2004) book. Let Xi denote the realization of roll number i. y) := xy. Let x0 . y0 the initial prices of the two stocks. which is a bit blurred and takes an eﬀort to swallow. 6 − (i − 1) . Hence the portfolio (a. Form a portfolio with positive return in any state.1. b) at this set at point (x0 . b) satisﬁes the requirement. Hence ax + by ≥ ax0 + by0 . 6 − (i − 1) Here I used the fact that the expected number of independent repetitions of an experiment until success is observed is 1/p.

let Zi denote the number of runs until I observe faces 6 1.7 6 5 4 3 2 1 1. i. Clearly E(Z1 ) = 1 . We use the following notation • H = the event that the ﬁrst coin shows head on the hiden side • Hi = the event (state) that the visible face of the ﬁrst coin is hi Then P (H|H1 ∪ H2 ∪ H3 ) = P [H ∩ (H1 ∪ H2 ∪ H3 )] = P (H1 ∪ H2 ∪ H3 ) 3 1· 1 +1· 1 +0· 1 2 i=1 P (H ∩ Hi ) 6 6 6 = = = 1 P (H1 ∪ H2 ∪ H3 ) 3 2 9 . . . i 6 6 6 6 6 6 + + + + + = 14. . and the ﬁrst coin is interpreted as the tossed coin. interpreted as the up faces of the three aligned coins. h2 } × {h3 . Thus or Thus E(Z6 ) = 6−i i [1 + E(Zi )] E(Zi ) = [1 + E(Zi−1 )] + 6 6 6 E(Zi ) − E(Zi−1 ) = . t1 } × {t2 . . What is the probability that there is a head on the other side of the coin? The probability space here is the permutations of the triplets in the set {h1 . = E(Zi |X1 = i) = 1 + E(Zi−1 ) E(Zi |X1 = i + 1) = . 2. a two-tailed coin and an ordinary coin are placed in a bag. We will have to compute E(Z6 ). . E(Zi ) = E[E(Zi |X1 )]. One of the coins is drawn at random and ﬂipped. Notice that E(Zi |X1 = 1) = . .Solution 2. . t3 }. = E(Zi |X1 = 6) = 1 + E(Zi ). it comes up “heads”. For i ≤ 6. A two-headed coin.10 The other side of the coin (related to Monty Hall problem) Winkler (2004) Problem 10. .

You’re one of a hundred people standing in line to get onto an airplane that has 100 seats. my seat (#100) and his seat (#1). those people are going to take some seat or another. If his seat gets taken by some displaced passenger then every other passenger who walks onto the plane including me. that passenger will take any seat at random. If my seat gets taken by some displaced passenger. Half the time my seat’s going to get taken by some displaced passenger. More precisely. decides.” He takes a seat at random. So your chances are one out of two. Nothing matters until either my seat gets taken or his seat gets taken. Indeed. 2. There is an equal probability that ﬂier i ∈ {1. there’s going to be one seat left. (notice that guy #100 takes seat 1) 10 . There’s a seat for every person who’s in line.1. Let’s count all the possible conﬁguration of seat assignments. The ﬁrst person to walk onto the plane drops his boarding pass and. generous. . or not. And how often does that happen? One time out of two. and each of you has a boarding pass for your assigned a seat. there are no more displaced passengers. . Whoever gets on the plane subsequent to him.11 One Seat Left. seat 1 must be free. . Because you are such a kind. (notice that guy #100 takes seat 1) • There is 1 conﬁguration in which guy #2 takes seat 100. if his seat was taken. every other passenger will take either his assigned seat or. Now. . ”I’m just going to sit anyplace. because everyone else is sitting in his correct seat. then I have zero chance of getting my seat. since as soon as seat 1 is occupied. and half the time his seat is going to get taken by a displaced passenger. otherwise again he would A more in-depth analysis can clarify maybe the problem. PBS radio Problem 11. if that seat is taken. we see that: • There is only 1 conﬁguration in which guy #1 takes seat 100. After a bit of thinking (enumerating cases). seat n cannot be occupied. All the other seats don’t make a diﬀerence. will have his assigned seat. you are the last passenger to walk onto the plane. instead of picking it up. Obviously. player 1 picks position 1 or n with equal probability. n − 1} will occupy seat 1 or n. Also. Is It Yours? ”Cartalk”. The question is: What are the chances that you get to sit in your assigned seat? There are only two seats that count. and accommodating person.

which should be inconsequential. (notice that guy #100 takes seat 1) • Finally. Thus the expected payoﬀ from switching is 1 m 1 1 ( − m) + (2m − m) = m. (notice that guy #100 takes seat 1) • There are 299−2 conﬁguration in which guy #99 takes seat 100. 11 . receiving the two envelopes. Indeed assume that the content of the two envelopes are y and 2y. mind-blowing. there are 2100−2 conﬁgurations in which guy #100 takes seat 100 This implies that the chances of taking your own place are 1/2. 2 2 2 4 How can this be? This is especially puzzling since an equally easy and sensible reasoning reveals that the expected payoﬀ from switching is zero.2 Indeed. If you do not observe the content of your envelope you realize that by switching you are equally likely to gain y or lose −y. You open one of them randomly. the agents expect zero gain from switching. makes you switch envelopes. A and B. See the reasoning in the text. (notice that guy #100 takes seat 1) • There are 22 conﬁguration in which guy #4 takes seat 100. and then you are given the option to switch and pick the other envelope. Thus ex-ante. irrespective of what you observe. There are two unopened envelopes. Hence it seems that the act of observing the content of your envelope. assume you see m in your envelope.• There are 21 conﬁguration in which guy #3 takes seat 100. 2 You can reformulate the problem with two people. Apparently both will want to switch their envelopes. You infer that the other envelope contains m/2 or 2m with equal probability. which is deeply troubling. check the content. before opening the envelope. You know that one contains twice as much money as the other.12 The envelope paradox I ﬁnd this paradox. thus the net gain is zero. A simple reasoning indicates that you will want to switch irrespective of which envelope you draw. 1. and knowing that the one envelope contains twice as much money as the other. discussed at length by Nalebuﬀ (1989). Problem 12.

Let S := R++ or if one insists on working with discrete spaces. or puzzling reasoning. no matter what you see. it does not depend on πS · πI . It also happens if πI is independent from πS · πI . the agent observes πS · πI rather than πS . outlined at the beginning. this amounts to saying that E[πS (3 − 2πI )|πS ] = πS · E(3 − 2πI ) = 0. (s. You observe πS ×πI . the paradox can be rephrased. πI of S ×I on S. simply assumes E (1/πI |πS · πI ) = 1 E(1/πI ) = 1 1 + 2 1 = 3 . πS (s) = −1 (m) = {(m/2. The σ-algebras −1 generated by πS and πS · πI are not ordered by inclusion. draw the fat or the skinny envelope). I are independent (hence the product measure on S×I). The probability space is (S × I. as follows. while (πS · πI ) payoﬀ conditional of observing the content of the envelope is E(πS (3 − 2πI )|πS · πI ) = πS · πI · (3E (1/πI |πS · πI ) − 2) . by the ﬂip of a fair coin. 1). The expected net {(s. Given a state (s. This happens for example if E (1/πI |πS · πI ) is 2 2 4 constant (i. Notice that PI is the uniform distribution on I. Thus s is interpreted as the amount of money in the envelope containing the smaller amount. i) ∈ S × I. then S := {2n |n ∈ Z}. Thus in a two-person formalization. B(S) ⊗ 2I . in technical terms. Indeed. The “sensible” approach to the decision problem (ex-ante reasoning). which is indeed the case. and you have the option to keep this amount or switch. What will you choose? The paradox rests on you always preferring to switch.To shed some light into the problem. and i is the multiplication factor drawn by consumer (double or not. he should be indiﬀerent. (m.e. netting you an additional πS (3 − 2πI ). which is the amount revealed by the envelope to the agent). This reﬂects the fact that the envelope shown to the agent is randomized among the two envelopes. 2). 2}. PS ⊗ PI ). However. both always want to exchange envelopes. The “incorrect”. 1)}. Mathematically. The net payoﬀ of the switching strategy is given by the random variable πS (3 − πI ) − πS πI = πS (3 − 2πI ). I will formalize it completely. hence the randomization device is not dependent on the content of the envelopes (on s). and the projections πS . the consumer sees the amount s · i.e.e. is for the agent to realize that irrespective of the amount πS that can be gain or lost by switching (i. Therefore. the amount in the lower envelope). Let I = {1. At the heart of the paradox is our gut instinct (and ﬂawed reasoning) that the probability of the agent having the low envelope when observing x 12 . 2)}. i.

Thus one feels that 1 P (πI = 1|πS · πI = x) = P (πI = 2|πS · πI = x) = 2 . and the expected proﬁt from switching is zero. that is the envelopes contain only integer (or natural. Thus 2 2 1 the agent is willing to switch if and only if f (x) ≥ 2 f ( x ) for all x > 0 2 (assuming continuous support). ∀x > 0. Petersburg paradox. one containing twice the amount in the other. for simplicity. hence the agent is indiﬀerent between switching or not.is equal to the probability of holding the high envelope. In fact. which kind of means that g is increasing. The downside with this solution is that the expected amount contained in the envelope is inﬁnite. Let. and they 13 . f (x) := P (πS = x) (the “density” of the marginal PS on S). 2 P (πS = x) + 2 P (πS = 2 ) The only way for the conditional probabilities of observing the high or the low envelope to be equal (which is built in our subconscious) is if f (x) = f ( x ). that is if S = {2n : n ∈ N}. f (x) + f ( x ) 2 Thus E(πS (3 − 2πI )|πS · πI = x) ≥ 0 if and only if f (x) ≥ 1 f ( x ). if one is not bothered by the existence of a lower bound) powers of 2. Thus 2 k there exists a constant k (equal to g(0)) such that f (x) ≥ x . It follows that the expected net proﬁt from switching is E (1/πI |πS · πI = x) = 1 x 2f(2) + f (x) . The envelope paradox can be formulated as a two person problem. and is reminiscent of the St. one can choose f (2n ) = 1 1 · . But this implies that PS (f ) is uniform. and there is no uniform 2 density over naturals (integers) (“the monstrous hypothesis”). Using the Bayes rule (and some heuristics). P (πI = 1|πS · πI = x) = P ((πI = 1) ∧ (πS πI = x)) P (πS πI = x|πI = 1)P (πI = 1) + P (πS πI = x|πI = 2)P (πI = 2) 1 2 P (πS = x) = 1 1 x . and the integral of this function diverges and cannot represent a proper probability density. But this implies that g(x) := xf (x) must satisfy g(x) ≥ g( x ). for discrete amounts. There are two envelopes. This argument does not work if one assumes the discrete form for S. I can modify f slightly to make it strictly proﬁtable to switch. 2 2n This is a valid probability density function on the set of powers of two with natural exponent.

The paradox is that apparently both agents want to switch. one ﬁlled with water and the other with wine. By the low of iterated expectations and Jensen’s inequality. There are two identical bottles. Assume that US and EU consumers (investors) are risk neutral so there should be no gains from trade in forex. E(W ) = E(cH 3 ) > cE(H)3 . Assume that the dollar/euro rate in the future is equally likely to be 1/2 or 2. If we let πI := 3 − πI . Then both types of agents will beneﬁt from trading in forex. the formulas are unchanged for the second agent. and the current spot rate is 1.13 Being average means you are obese Problem 13.are assigned to two persons by ﬂipping a coin. 2 2. let it homogeneize. average weight conditional on the height is proportional to the cube of height. The mathematical discussion is identical. E(W |H) = cH 3 . and hence proportional with the cube of height H (some argue that the empirical relationship is closer to the square rather than the cube of height. The idea is that weight W is proportional to volume. To be exact. all the wine missing from the wine bottle must be in the second. One transfer a spoon of wine in the water. For example.1 Other puzzles Wine in water and viceversa Problem 14. the net proﬁt from switching is πS (3 − 2πI ) = −πS (3 − 2πI ). Thus the expected weight of an average height person is cE(H)3 . and of course the water 14 . Assume also that the forward rate is 1 (but this is not necessary). 1. etc. and then transfer a spoon of water (with wine traces) back into the wine bottle. A simple illustration of the paradox is the following. Which of the two bottles contains more foreign substance? One is tempted to go into computing proportions. but the conclusion still holds). The paradox is related to Siegel’s paradox. Show that an average height and weight person is overweight. Actually is clear that since the bottles end with the same volume of liquid. and replace φI everywhere by φI . which shows that the average weight in the population is greater than the average weight of the average height person. Everything written before applies to the ﬁrst agent. But πI and πI have identical distributions and can identical reasonings apply.

thus all persons except his wife will have labels greater or equal to 1 and thus his wife must be the person with label 0. . The host. (1986): Paradoxes in probability theory and mathematical statistics. Akademiai Kiado. Notice that person 2 shook the hands of person 8 and 7. I refer to persons by the number of persons that shook their hands. AK Peters. except Mike. Since person 1 shook already hands with person 8. 5 and 3 are spouses. B. P. 1. polls every other person and ﬁnds out that each shook hands with a diﬀerent number of people. There are 5 couples at a party and each person shakes hands with the persons he does not know. Mike. thus Tess shook the hands of 4 person.it replaces must end up in the wine bottle. . 2. Thus the same amount of foreign substance is found in both bottles. How many handshakes did his wife. 3(1). 8 persons. it follows that person 1 is married to person 7. so it cannot shake hands with person 6. Szekely.” Journal of Economic Perspectives. References Nalebuff. 171–181. 2. 1 edn. G. Winkler. (1989): “Puzzles: The other person’s envelope is always greener. person 6 shakes hands with everyone except his wife and person 0 and 1. . Person 8 shakes the hand of everyone except his wife. Similarly. Tess. Person 7 shakes the hand of everyone except his wife and person 0. Similarly.2 Mind blowing party combinatorics Problem 15. thus it is the spouse of 6. 15 . It follows that 4 is the spouse of Mike. . shook the hands of 0. have (how many unknown persons for Tess existed at the party)? It follows that the party attendants. (2004): Mathematical Puzzles: A Connoisseur’s Collection.

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