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Fair price of a repeated two-tetrahedron game

Question

Each turn you roll two four-sided dice, one red and one blue, each numbered 1 to 4. If blue beats red you receive the difference; if red beats blue you receive nothing. If they tie, the game ends at once; otherwise you play another turn. What is the fair value of this game?

Short answer

2.52.5. Per turn, P(tie)=14P(\text{tie})=\tfrac14 and the expected payment is 116(3⋅1+2⋅2+1⋅3)=58\tfrac{1}{16}(3\cdot1+2\cdot2+1\cdot3)=\tfrac58. The value satisfies V=58+34VV=\tfrac58+\tfrac34V, so V=52V=\tfrac52.

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