474.Redraws at Two Cents
★★★optimal stoppingCh. 6 — Random Variables and Expectation444+ Problems in Probability
You draw a uniform random number from . You may pay per draw to generate additional numbers, as many times as you like, seeing each result before deciding. Your payout is the maximum of all numbers drawn, minus the total fees. Under the optimal strategy, what is your expected net payout?
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Find the threshold where one more draw's expected improvement, , exactly equals the fee.
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