envelope paradox an apparent paradox in decision theory that runs as follows. You are shown two envelopes, M and N, and are reliably informed that each contains some finite positive amount of money, that the amount in one unspecified envelope is twice the amount in the unspecified other, and that you may choose only one. Call the amount in M ‘m’ and that in N ‘n’. It might seem that: there is a half chance that m % 2n and a half chance that m = n/2, so that the ‘expected value’ of m is (½)(2n) ! (½)(n/2) % 1.25n, so that you should prefer envelope M. But by similar reasoning it might seem that the expected value of n is 1.25m, so that you should prefer envelope N. See also DECISION THEORY. D.A.J.