probability   *	payout	=
1 heads									.5		0	= 0
   tails		2 heads 							.25		1 	= .25
		    tails		3 heads					.125		2	= .25	
				   tails		4 heads			.0625		4	= .25	
						   tails		5 heads	.03125		8	= .25




"Eva Pao" <epao@mba2002.hbs.edu> on 05/13/2001 03:23:47 PM
Please respond to <epao@mba2002.hbs.edu>
To:	<John.Arnold@enron.com>
cc:	 
Subject:	RE: waiting


which game is that?


-----Original Message-----
From: John.Arnold@enron.com [mailto:John.Arnold@enron.com]
Sent: Sunday, May 13, 2001 5:16 PM
To: epao@mba2002.hbs.edu
Subject: Re: waiting



Expected value of game = 1/2 * 0 + 1/4 * 1 + 1/8 *2 + 1/16 *4 +1/32 *
8+....
                   = 0        +.25       +.25      +.25      +.25      +...
                   = infinity





"Eva Pao" <epao@mba2002.hbs.edu> on 05/13/2001 03:11:46 PM

Please respond to <epao@mba2002.hbs.edu>

To:   <John.Arnold@enron.com>
cc:
Subject:  waiting




-----Original Message-----
From: John.Arnold@enron.com [mailto:John.Arnold@enron.com]
Sent: Sunday, May 13, 2001 4:37 PM
To: epao@mba2002.hbs.edu
Subject: Re: Extra credit



rules to a game:
You flip a coin. If you get tails you win 0.  if you get heads, i give you
$1.  Keep flipping until you get a tails, at which point you walk away with
the money.  however, each heads you get after the first you double your
money.  So if you flip heads 3 times and then tails, you get $4.  What's
you bid/offer on playing this game?  (would you pay $.5 to play? $1? $2?
what you charge me play against you?)