Question
You and I can play the following game. A fair coin is tossed; then, if the head shows up, I pay you $2, and if
You and I can play the following game. A fair coin is tossed; then, if the head shows up, I pay you $2, and if the tail shows up, you pay me $2. After the first tossing, you can choose to quit the game or play another round with payment doubled (i.e. $4). At most two rounds can be played in total, and you can choose not to play at all. If maximizing EMV is the decision criterion, you will:
A) always play the game for only one round.
B) always play the game for two rounds. C) decide for the second round based on the outcome of the first round. D) be indifferent between playing each round of the game and not playing.
E) None of the above.
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