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MrRubix · 10-13-2009, 05:08 PM

Another question given in an interview (a bit easier, also a favorite question of mine... simple and yet teaches a lot about expectation):

I have a game where you can roll a die and receive, in dollars, what you roll (rolling a 1 means you get $1, 2 you get $2, etc). However, assuming you are risk-neutral (e.g. equally sensitive to a gain of X versus a loss of X), and assuming there is a fee to play this game, what is the maximum fee you should be willing to pay to play this game?

What about with two dice? You roll the first one and can either accept it and get paid what you rolled, or you can discard it and take whatever you roll on the second die. How much would you be willing to pay for THIS game?

Three dice?

N dice?

10-13-2009, 05:08 PM	#88
MrRubix FFR Player Join Date: Dec 1969 Location: New York City, New York Posts: 8,340	Re: Solve this equation for me Another question given in an interview (a bit easier, also a favorite question of mine... simple and yet teaches a lot about expectation): I have a game where you can roll a die and receive, in dollars, what you roll (rolling a 1 means you get $1, 2 you get $2, etc). However, assuming you are risk-neutral (e.g. equally sensitive to a gain of X versus a loss of X), and assuming there is a fee to play this game, what is the maximum fee you should be willing to pay to play this game? What about with two dice? You roll the first one and can either accept it and get paid what you rolled, or you can discard it and take whatever you roll on the second die. How much would you be willing to pay for THIS game? Three dice? N dice? __________________ https://www.youtube.com/watch?v=0es0Mip1jWY