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 Pick a card, any card.. (Posted on 2008-03-11)
You sit down with a well mixed deck containing A cards marked "+" and B cards marked "—". You may draw cards from this deck as long as you want, i.e., you can stop playing at any point. Each time you draw a + card you are given \$1 and each time you draw a — card you have to pay \$1. Cards are not replaced after having been drawn.

What would be a fair amount to pay for the right to play (i.e., what is the expected payoff) and under what circumstance should a player cease drawing?

 No Solution Yet Submitted by FrankM Rating: 2.7500 (4 votes)

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 re: solution--I think | Comment 3 of 37 |
(In reply to solution--I think by Charlie)

If A=2 and B=3 there is a 40% chance of winning \$1, a 40% chance of breaking even and a 20% chance of losing \$1.

I don't have an answer yet, but with the choice of stopping at any point, the odds shift.

 Posted by Leming on 2008-03-11 15:16:43

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