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Quit as a winner (Posted on 2015-09-24) Difficulty: 4 of 5
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.

No Solution Yet Submitted by Ady TZIDON    
Rating: 5.0000 (1 votes)

Comments: ( Back to comment list | You must be logged in to post comments.)
re(2): some research (spoiler) Comment 8 of 8 |
(In reply to re: some research (spoiler) by Jer)

Ummm... why $2 rather than the still-fair $2.62?

Remember that the 2.62 average includes the zeros for the non-winning cases; it's the average per trial, not the average per win.

Oh, sorry; I see Ady wants integer dollars only.

Edited on September 24, 2015, 6:40 pm

Edited on September 24, 2015, 6:42 pm
  Posted by Charlie on 2015-09-24 18:35:16

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