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Mathematics, 15.10.2020 08:01 kaylaamberd
A person tosses a fair coin until a tail appears for the first time. If the tail appears on the nth flip, the person wins
2n
dollars. Let X denote the player’s winnings. Show that
E[X]=+[infinity]
This problem is known as the St. Petersburg paradox.
(a) Would you be willing to pay $1 million to play this game once?
(b) Would you be willing to pay $1 million for each game if you could play for as long as you liked and only had to settle up when you stopped playing?
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A person tosses a fair coin until a tail appears for the first time. If the tail appears on the nth...
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