The Card Game Strategy
Riddle:
You draw cards from a 52-card deck, red = +$1, black = –$1. You can stop anytime. What’s the best stopping rule? Expected payoff?
Answer:
Answer: Stop when your profit is positive. Explanation: Mathematically, using the “optimal stopping” strategy (also known as the “red-black card problem”), the expected payoff is about $2.62.