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Math Help - Simulation/Game

  1. #1
    Senior Member Sampras's Avatar
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    Simulation/Game

    A fair coin will be tossed until the first time it comes up heads. If it comes up on the jth toss, then you win  2^j dollars. You are guaranteed to win at least 2 dollars. What is a reasonable amount to pay to play this game?

    So use some type of simulation?
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  2. #2
    MHF Contributor matheagle's Avatar
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    st pete game? by pete sampras? And it's ducats by the way.
    There is NO fair entrance fee unless you look at the weighted winnings.
    I have been doing this kind of work for over 20 years.
    In Feller (vol 1, I think) there is a weak solution (convergence in probability)
    BUT that isn't advisable unless you're the gambler.
    Since the limsup of the ratio of winnings to cummulative entrance fee is infinite with probability one.
    And the liminf is finite (with probability one) the same value that Feller obtained in his Weak Law.
    http://www.math.sinica.edu.tw/bullet...83/2008303.pdf
    The Bernoulli's asked this question 295 years ago.
    You're a little late to this GAME.
    Last edited by matheagle; August 18th 2009 at 09:21 PM.
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