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Monty Hall Spinoff Thread: St. Petersburg Paradox
Posted on 8/12/17 at 4:40 pm
Posted on 8/12/17 at 4:40 pm
Let's say you have the opportunity to play a coin flip game. If you get heads, you win $1. If you get two heads in a row, you get $2. To generalize, for however many heads in a row you get, the amount you win doubles with each head. If you get a tails at any time, the game ends and you get the amount of money you won so far.
The issue comes when deciding what is a fair price to play such a game. You have a 1/2 chance of winning $1, a 1/4 chance of $2, a 1/8 chance of $4, and so on. As the chance of continuing the game decreases at the same rate the amount of winnings increases, the expected value of such a game is infinite.
How much would you pay to play?
The issue comes when deciding what is a fair price to play such a game. You have a 1/2 chance of winning $1, a 1/4 chance of $2, a 1/8 chance of $4, and so on. As the chance of continuing the game decreases at the same rate the amount of winnings increases, the expected value of such a game is infinite.
How much would you pay to play?
This post was edited on 8/12/17 at 4:43 pm
11
Posted on 8/12/17 at 4:43 pm to STLDawg
You said spinoff.
Posted on 8/12/17 at 4:44 pm to STLDawg
quote:hosted Let'sa maka deala
Monte Carlo
Posted on 8/12/17 at 4:45 pm to STLDawg
quote:
How much would you pay to play?
about tree fiddy
Posted on 8/12/17 at 4:46 pm to STLDawg
50 cents
Posted on 8/12/17 at 4:47 pm to STLDawg
Col. Mustard in the study with the wrench.
This post was edited on 8/12/17 at 4:48 pm
Posted on 8/12/17 at 4:48 pm to STLDawg
Expected Value
Posted on 8/12/17 at 5:00 pm to STLDawg
42
Posted on 8/12/17 at 5:25 pm to STLDawg
Idk, probably like a dollar.
It doesn't matter if you flip 10000 heads in a row, the chance of the next flip is still 50/50. Odds are you wouldn't win more than a few bucks so I certainly wouldn't put much into it.
It doesn't matter if you flip 10000 heads in a row, the chance of the next flip is still 50/50. Odds are you wouldn't win more than a few bucks so I certainly wouldn't put much into it.
Posted on 8/12/17 at 5:36 pm to STLDawg
Whatever the calculated average winnings are, Vegas would set the entry to be much higher than that.
Say, your average payout is $5 in this game. Vegas would probably charge $8 to play.
$3 average profit for every time played.Vegas wins again and builds another billion dollar casino, using 0 tax dollars.
Say, your average payout is $5 in this game. Vegas would probably charge $8 to play.
$3 average profit for every time played.Vegas wins again and builds another billion dollar casino, using 0 tax dollars.
Posted on 8/12/17 at 5:46 pm to STLDawg
quote:
You have a 1/2 chance of winning $1, a 1/4 chance of $2, a 1/8 chance of $4, and so on.
That isn't right. Each flip of the coin is 50/50. The coin has no memory nor control over the flip.
quote:
As the chance of continuing the game decreases at the same rate the amount of winnings increases, the expected value of such a game is infinite.
No it is the same odds for every flip.
Posted on 8/12/17 at 5:59 pm to STLDawg
quote:
The issue comes when deciding what is a fair price to play such a game. You have a 1/2 chance of winning $1, a 1/4 chance of $2, a 1/8 chance of $4, and so on.
Nope.
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