Concept

Necktie paradox

Résumé
The necktie paradox is a puzzle and paradox with a subjective interpretation of probability theory describing a paradoxical bet advantageous to both involved parties. The two-envelope paradox is a variation of the necktie paradox. Statement of paradox Two persons, each given a necktie, start arguing over who has the cheaper one. The person with the more expensive necktie must give it to the other person. The first person reasons as follows: winning and losing are equally likely. If I lose, then I will lose the value of my necktie. But if I win, then I will win more than the value of my necktie. Therefore, the wager is to my advantage. The second person can consider the wager in exactly the same way; thus, paradoxically, it seems both persons have the advantage in the bet. Resolution The paradox can be resolved by giving more careful consideration to what is lost in one scenario ("the value of my necktie") and what is won in the other ("more than the value of my
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