Players A and B are playing a game consisting of turns. There are two buttons placed in front of both A and B, labelled with 0 and 1 respectively. At one turn they both have to choose one of the buttons in front of them and press it simultaneously. After that we calculate the sum of the values of the labels on the two pressed buttons and call it . Suppose that if , B has to give $1 to A, if , A has to hand $2 to B, and finally if , B has to give $ to A with . After turns have been played, we name a winner based on who has more money. As goes to infinity, determine the maximum value of for which B always has a winning strategy if .
Details and assumptions: A and B can not see their opponent's choice before revealing his. They can not communicate with each other during the game either. Assume that we allow the players to have a negative amount of money, for instance in the form of loan and debt.
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Assume that at a given turn, A chooses label 0 and 1 with a probability of p and 1 − p respectively, likewisely B chooses label 0 and 1 with probability q and 1 − p , respectively.
We will start by calculating the expected value of money gained by B at this turn. Notice that the sum of the money A and B possesses does not change over the game, hence the sum of expected values must be 0 (so E ( A ) = − E ( B ) ). This implies that if one of them manages to find a strategy that assures his expected value to be positive throughout the game, he is winning as n goes to infinity.
It is known that the expected value equals to the weighted mean of the values of the possible outcomes with weights of corresponding probabilities, which means that
E ( B ) = ( − 1 ) ⋅ p q + 2 ⋅ p ( 1 − q ) + 2 ⋅ q ( 1 − p ) + ( − a ) ⋅ ( 1 − p ) ( 1 − q ) = − ( a + 5 ) p q + ( a + 2 ) p + ( a + 2 ) q − a = − ( a + 5 ) [ p q − a + 5 a + 2 q a + 5 a + 2 p + a + 5 a = − ( a + 5 ) [ ( p − a + 5 a + 2 ) ( q − a + 5 a + 2 ) − ( a + 5 a + 2 ) 2 + a + 5 a ] = − ( a + 5 ) ( p − a + 5 a + 2 ) ( q − a + 5 a + 2 ) + a + 5 ( a + 2 ) 2 − a = − ( a + 5 ) ( p − a + 5 a + 2 ) ( q − a + 5 a + 2 ) + a + 5 4 − a
Clearly B has a winning strategy if he manages to keep E ( B ) positive at every turn. Note that if B chooses q to be a + 5 a + 2 , the value E ( B ) equals to a + 5 4 − a , which is positive if a < 4 . Thus we've concluded that if a < 4 , with the strategy of choosing label 0 and 1 with probabilities a + 5 a + 2 and 1 − a + 5 a + 2 respectively, no matter what A's strategy is (nor the value of p ), B is certainly winning as the number of games approaches infinity.
Similarly, if a > 4 , with the strategy of pressing the button labelled with 0 and 1 with probability a + 5 a + 2 and 1 − a + 5 a + 2 respectively, A has got a winning strategy since E ( A ) = − E ( B ) = − a + 5 4 − a > 0 .
If a = 4 neither of them has a certain winning strategy, so the game can be called fair in this case.
Henceforth, our answer is 4.