posted by bret on .
consider a state lottery that has a weekly television show. on this show, a contestant receives the opportunity to win $1 million dollars. the contestant picks from 4 hidden windows. behind each window is one of the following: $150,000, $200,000, $1 million, or a stopper. before begining, the conestant is offered $100,000 to stop. mathematically speeking, should the contestant take the $100,000. justify your answer.
The contestant has 3 out of 4 chances to make more than $100,000. If he's even a moderate risk taker, then he should turn down the $100,000. However, if he wants to be sure of going home with a substantial amount of money, he'd take the $100,000.