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(i) How much should one pay to play a game where a fair, six-sided die, which is numbered one through six, is rolled and the player is paid, in dollars, the value that is face up after the roll? (Ii) How much should one pay to play the same game as above, but now the player has the option to roll the die again, for a total of two rolls? (For the sake of specificity, the player can roll the die once. If she is happy with the roll, she is paid out the face value of the roll. If she is unhappy with it, she rolls again and is paid out the face value of that roll). (iii) How much should one pay to play the game in (ii) with an additional roll, for a total of three rolls? (iv) How much should one pay to play the game with an infinite number of additional rolls>
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Trading Intern

Interviewed at DRW

4.3★
Dec 27, 2014

(i) How much should one pay to play a game where a fair, six-sided die, which is numbered one through six, is rolled and the player is paid, in dollars, the value that is face up after the roll? (Ii) How much should one pay to play the same game as above, but now the player has the option to roll the die again, for a total of two rolls? (For the sake of specificity, the player can roll the die once. If she is happy with the roll, she is paid out the face value of the roll. If she is unhappy with it, she rolls again and is paid out the face value of that roll). (iii) How much should one pay to play the game in (ii) with an additional roll, for a total of three rolls? (iv) How much should one pay to play the game with an infinite number of additional rolls>

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