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?
(In reply to Incorrect assumption
Paradoxically, stopping play after a "small" excess of B has been reached is also an incorrect assumption.
Posted by Charlie
on 2008-03-12 15:49:09