An urn contains 4 blue balls and 3 red balls. You draw balls one at a time without replacement. Each blue ball drawn pays you $\$2$, and each red ball drawn costs you $\$2$. After each draw, you see the color and can choose to stop or continue. You can also stop before drawing at all (taking $\$0$)…

Urn Game Optimal Stopping Strategy

Game Theory · Hard · Free problem

An urn contains 4 blue balls and 3 red balls. You draw balls one at a time without replacement. Each blue ball drawn pays you $\

$, and each red ball drawn costs you $\ $. After each draw, you see the color and can choose to stop or continue. You can also stop before drawing at all (taking $\$0$). What is the optimal stopping strategy, and what is the expected value of the game under optimal play?

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