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 Quit as a winner (Posted on 2015-09-24)
You have a normal deck of 52 playing cards You draw cards one by one (Cards drawn are not returned to the deck).
A red card pays you a dollar. A black one fines you a dollar.
You can stop any time you want.

a. What is the optimal stopping rule in terms of maximizing expected payoff?
b. What is the expected payoff following this optimal rule?
c. What amount in dollars (integer values only ) are you willing to pay for one session (i.e. playing as long as you wish, not exceeding the deck), using your strategy?

Source will be disclosed after the solution is published.

Comments: ( Back to comment list | You must be logged in to post comments.)
 re: some research (spoiler) | Comment 7 of 8 |
(In reply to some research (spoiler) by Charlie)

A wonderful analysis.  I wish it were one of ours!

And it provides a simple way of expanding to any number of cards (which I had hoped to do.)

The only unanswered question from the problem itself is part c.

 Posted by Jer on 2015-09-24 17:52:39

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