$1M in Box 2 | $0 in Box 2 | |
---|---|---|
Take only box 2 | $1M | $0 |
Take both boxes | 1000 | $1000 |
Background
There is a predictor that is 99% accurate is predicting whether people will only take box 2 or both boxes
Procedure
- Predictor makes their prediction
- They put $1000 in box 1 (which you know)
- They put 1M if they think you will only take box 2
- Choose either both boxes or box 2
Arguments
- Two-box argument: dominance argument
- We can perhaps rule out the dominance argument because it only applies when states are independent of our actions (which is not the case here)
- One-box argument: taking only box 2 almost guarantees $1M. Calculate using expected utility
- EU(both) = 0.01(1M + 1k) + 0.99(1k) = 11k
- EU(box 2) = 0.99(1M) + 0.01(0) = 990k