Probability Problem

Question

A certain game involves tossing 3 fair coins, and it pays 14 cents for 3 heads, 6 cents for 2 heads, and 2 cents for 1 head. Is 6 cents a fair price to pay to play this game? That is, does the 6 cents cost to play make the game fair?

Answer 1

The expectation is 14*(1/8) + 6*(3/8) + 1*(3/8) = 23/8.

Therefore, 6 is more than the expectation...not a fair game.