Here’s the setup: I have a single fair die and will pay you whatever you roll (e.g. you roll a 1: you receive $1, you roll a 2: you receive $2).
Question 1: What is the most you should ever pay to play this game?
Question 2: If I give you the option to roll again, how much is this option worth?
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$3.50 eV of a dice
$4.25 eV of 2nd dice
Why would the eV of dice 2 be 4.25?
because Uncle Tony said so
Tony You're correct with question 1. Question two, you are halfway there, but think of it as how much would you pay for that option.
He's not asking the eV; he is asking how much is the most you would pay to play
Minor technicality, the answer to the second part should be $0.75.
tonyperkis +1 dabanobo +1
Why is the second answer $.75?
Isn't the first answer $3.49? At that point you have value. At $3.50 you're gambling.
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