Last post wins.

[aaronINdayton]

(07-04-2012 01:46 AM)phrenikos Wrote:  I've got one for you non-stat majors (St. petersburg paradox):

Let's say I offer you a game: A coin is tossed at every stage. The pot starts at 1 dollar and is doubled every time a head appears. When a tail appears, the game ends and you win the money in the pot.

(i.e. You win 4 dollars if two heads appear, and then a tail appears after)

How much are you willing to pay for this game?

To give a realistic answer, you'd need more information. Such as: how long does it take to play a game? How long will I be able to play? How much money do you have to give me? Etc.

According to the wikipedia article linked: "It follows that, in order to be reasonably confident of achieving target average per-game winnings of approximately W (where W > $1), we should play approximately 4^W games. This will yield a finite contribution equal to W. Unfortunately, the number of games required to be confident of meeting even modest targets is astronomically high. $7 requires approximately 16,000 games, $10 requires approximately 1 million games, and $20 requires approximately 1 trillion games."

Realistically, you wouldn't have time to play and make money unless you paid less than $3 a game. And even then, you'd probably make more money just getting a job.