This problem causes us to confuse prior (before information is learned) and posterior (after information is learned) probabilities. The prior probability that A has the lower amount is 1/2. The same posterior probability is:
Pr(A=x & B=2x)/[Pr(A=x & B=2x) + Pr(A=x & B=x/2)].
The posterior probability that A has the higher amount is:
Pr(A=x & B=x/2)/[Pr(A=x & B=2x) + Pr(A=x & B=x/2)].
These are the expressions you must use in the expectation under "What if you open envelope A?". In general, they can't both be 1/2 - your benefactor would have to possess an infinite supply of money.
This problem causes us to confuse prior (before information is learned) and posterior (after information is learned) probabilities. The prior probability that A has the lower amount is 1/2. The same posterior probability is:
Pr(A=x & B=2x)/[Pr(A=x & B=2x) + Pr(A=x & B=x/2)].
The posterior probability that A has the higher amount is:
Pr(A=x & B=x/2)/[Pr(A=x & B=2x) + Pr(A=x & B=x/2)].
These are the expressions you must use in the expectation under "What if you open envelope A?". In general, they can't both be 1/2 - your benefactor would have to possess an infinite supply of money.