Grinstead-Snell-Probability · Problem 5.1.25

Distributions and Densities

Mathematics · poisson-distribution

Problem

Reese Prosser never puts money in a 10-cent parking meter in Hanover. He assumes that there is a probability of .05 that he will be caught. The first offense costs nothing, the second costs 2 dollars, and subsequent offenses cost 5 dollars each. Under his assumptions, how does the expected cost of parking 100 times without paying the meter compare with the cost of paying the meter each time?

Related theory

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