[jason1990]

The question in the OP is: Is switching +EV? The answer is, it depends. It depends on (i) the amount you see and (ii) the way in which those amounts were chosen by the person who put the money in there.

Both arguments are flawed. Argument 2 is flawed because it doesn't even answer the question. It answers the question, is always switching +EV? Argument 1 is flawed because, after seeing the first amount, there is not a 50% chance you have the higher amount. The probability depends on (i) and (ii) above. If you make assumptions about (ii), then you can calculate the EV. Sometimes it will be positive, sometimes it will be negative.

Your friend is wrong. He did not identify the flaw in Argument 1. Specifically, your friend thinks that the fact that the money was determined before you chose has something to do with the EV. But we know from our poker experience that this is a silly argument. The deck is shuffled and the order of the cards is determined prior to any of our bets. But that does not affect our EV calculations, which are based on the fact that we don't know this order, not that the order is yet to be determined.