3 ms·
The expected value is the same: (0.5 * 2X) + (0.5 * 0) = X = (X * 1.0) but perhaps you would be able to attract more customers. I doubt it. While it's certain
by Rod 17y ago
The expected value is the same:
(0.5 * 2X) + (0.5 * 0) = X = (X * 1.0)
but perhaps you would be able to attract more customers. I doubt it. While it's certainly true that everybody loves a freebie, no one likes to pay twice for something.
Why not charge X with probability (1-p) and charge zero with probability p? The expected value would be reduced to (1-p) but perhaps you would attract people looking for freebies. More customers is always a good thing, right?