Posted by Sandra on Friday, November 20, 2009 at 1:38am.
You are on a TV show. You have been asked to either play a dice game five times or accept a $50 bill. The dice game works like this:
If you roll a 1, 2 or 3, you win $46.
If you roll a 4 or 5, you lose $22.
If you roll a 6, you lose $85.
Should you play the game? Use expected values and decision theory to justify your answer. (Round the answer to the nearest cent.)

Mathematics for Liberal Arts  drwls, Friday, November 20, 2009 at 2:11am
The expected winning per game is
(1/2)*46  (1/3)*22  (1/6)*85
If that is positive, play the game

Mathematics for Liberal Arts  Reiny, Friday, November 20, 2009 at 12:29pm
Take the $50 and quit.
(Each game as outlined by drwls has an expected value of $1.50.
You are playing it 5 times, so the expected return is $7.50.
Your choice was to either accept $50 or play the game)

Mathematics for Liberal Arts  drwls, Friday, November 20, 2009 at 4:13pm
Reiny is correct. I assumed you were betting your own money. I didn't read all the question.
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