Translation invariance and finite additivity in a probability measure on the natural numbers
The authors start with a discussion of the following ``two envelopes exchange problem. A random (positive) amount of money is put in an envelope \(O\). A coin is flipped and if the coin comes up heads, twice the amount of money in envelope \(O\) is put in a second envelope \(T\) and if the coin comes up tails, half the amount of money in envelope \(O\) is put in envelope \(T\). The paradox arises by reasoning that if we choose one envelope (no matter which one), then there is a \(50\%\) chance that the other envelope contains one-half the amount we hold, and there is \(50\%\) chance that the other envelope contains twice the amount we hold. That is, the other envelope has the expected value of 1.25 times the amount in the envelope we hold. Hence ``the other person's envelope is always greener. As shown by the first author in an earlier paper, the paradox can be resolved if a probability distribution is given by which the amount of money to be put in \(O\) is determined. The expected amount in \(O\) is then the expected value of this distribution and the expected amount in \(T\) is 1.25 times the expected amount in \(O\). The authors argue in favor of addressing the paradox using finitely additive probability. A subset \(S\) of the natural numbers \(\mathbb{N}\) is said to be measurable if there exists its asymptotic density \(P(S)= \lim_{n\to\infty} (1/n)\text{card}(S\cap \{1,\dots,n\})\). This defines a finitely additive probability measure \(P\) on measurable sets (not all subsets of \(\mathbb{N}\) are measurable). The measure is translation invariant, uniform \((P(\{A \})=0\) for all finite sets \(A)\), and for each \(r\in[0,1]\) there exists a measurable set \(S\) such that \(P(S)=r\). Now, assume that the value \(n\) is associated with the set \(\{n\}\). The ``cumulative expected value, defined via \[ \lim_{n\to\infty} \sum^n_{i=1} i(1/n)\text{card}\bigl(\{i\} \cap\{1,\dots,n\} \bigr)= \lim_{n\to\infty} \bigl(n(n+1)/2n \bigr), \] gives an infinite expected value for the contents of both envelopes \(O\) and \(T\) (the usual expected value in envelope \(O\) is \(\sum^\infty_{i=1} iP(\{i\})=0\), which is absurd) and the paradox is resolved. Therefore the authors propose that, in the setting of the two-envelopes problem, probabilities and expected values be computed as above.
- A note on translation continuity of probability measures
- Translation-invariant probability measures on entire functions
- On Some Non-Staadard Finitely Additive Probability Measures
- A Note on Invariant Finitely Additive Measures
- Some properties of finitely additive probabilities
- On the distribution of translates of additive functions
- Finitely Additive Measures on N and the Additive Property
- On the additive property of finitely additive measures
- Finitely additive measures in action
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