In last week's Brain Potion (found by clicking here) we asked for a strategy so you could guarantee you won as much money as possible. This week we explore this game a little further, introducing the concept of Expected Value and showing how expected values relate to our card game!
Let's consider some simple examples first.
The concept of expected values can explain why the new allowance proposal is very similar in the long run to your previous allowance.
- Originally you got $\$10$ each week, therefore each week you expect $\$10$!
- Under the new proposal there is a $50\%$ chance you get $\$20$ and a $50\%$ chance you get $\$0$. Thus we say the expected value of your allowance is $$50\%\times \$20 + 50\%\times \$0 = \$10,$$ the same as before!
With this proposal there is a $\dfrac{1}{6}$ chance you lose $\$10$, a $\dfrac{3}{6}$ chance you get $\$10$, and a $\dfrac{2}{6}$ chance you get $\$20$. Hence the expected value is $$\frac{1}{6}\times (-\$10) + \frac{1}{2}\times \$10 + \frac{1}{3}\times \$20 = \$10,$$ still the same as before!
Let's now use expected values to explore the card game above in more detail when $N = 2$. Recall this means, when shuffled, the $2$ black ($B$) cards and $2$ red cards ($R$) can be arranged in $6$ ways, shown below: $$BBRR, BRBR, BRRB, RBBR, RBRB, RRBB.$$ Each of these $6$ orderings is equally likely, so has a $\dfrac{1}{6}$ chance of occurring.
You're still trying to figure out how to play the game (as asked last week) to make sure you always win the same amount of money each time you play. However, your two friends Rick and Mark have other plans.
- Rick wants to go all or nothing. He always thinks that the cards will come in the order $BBRR$, so will always bet $B$ for the 1st card, $B$ for the 2nd card, etc, risking ALL of his money each time.
- Mark plays it a little safer. He only bets on the 2nd and 4th card. He still bets all his money, but bases his guess on earlier cards. For example, if the 1st card is $B$, then he bets all on $R$ for the 2nd. (Note Mark will always get the 4th card correct.)
Rick has the chance to win up to $\$16 = \$1\times 2\times 2\times 2\times 2$ while Mark has the chance to win up to $\$4 = \$1\times 2\times 2$. However, the expected values of what they win are actually equal. What is this expected value?
Further, the amount you can guarantee you win is equal to this expected value as well. Try to use this fact to help you come up with a strategy! See if you can extend the reasoning about expected values to help with $N = 3$ or above in the game as well!
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