[Math] Expectation and best strategy for a dice game

diceprobability

I am somewhat stuck on this problem, it should be straightforward but I cannot find a clearly explained solution:

A single dice is rolled as many times as you want. For each throw, you receive n dollars if dice shows $n$, if $n<6$. If dice shows $6$, you lose all the money accumulated and the game stops. What is the expectation and the best strategy for this game?

Best Answer

The probability that you are still in game after the n-th game is just $(\frac 56)^n$. The average amount of money per non losing game is $(1+2+3+4+5)/5=3$. Hence after $n$ games you are stick with an amount of Money $M(n)$: \begin{equation} M(n)= 3 \cdot n \cdot\left( \frac 56 \right)^n \end{equation}

Now you can maximise this function and get a maximum at $n=\frac{1}{\log(\frac 65)}\approx 5.48$.

So you know that either 5 or 6 is the best number of games. Calculating M(5) and M(6) yields the result that the expectation value of money after 5 or 6 games is acutally the same, namely:

\begin{equation} M(5) = M(6) = \frac{15625}{2592}\approx 6.03 \end{equation}

Edit: (due to other posts) When you however can use the knowledge of your current money, you could do better. You should just stop playing, when in average you lose more money than you win. This happens when the expectation value gets negative. Assume now, that you have already won $N$ coins. You lose per with the probability $\frac 16 \;\; N$ coins. In the same move you win 3 coins with probability $\frac 56$. Hence they are equal, when $\frac N6 = 3\cdot \frac 56$. This yields $N=15$. So you have to stop playing (or could play 1 more time; it doesn't matter) when you reached 15 coins.

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