I think the point he is getting at is that expected value (or even expected utility) is not actually a good measure of human preferences. Additionally, in this

I think the point he is getting at is that expected value (or even expected utility) is not actually a good measure of human preferences. Additionally, in this problem there are certain distributions over the amounts in the envelope for which the expected value is not defined, making it an interesting problem to study. http://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow http://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow is a good book exploring mathematical models for decision making.