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Splitting black and white balls between two sacks

Question

You have 5050 white and 5050 black balls and two sacks, and must place every ball in one of the sacks. Afterwards a sack is chosen with probability 12\tfrac12 each and a ball is drawn at random from it. You win if the ball is white. How should you distribute the balls to maximise your winning chance, and what is that chance?

Short answer

Put one white ball alone in one sack and all 9999 others in the second: winning chance 7499≈0.747\tfrac{74}{99}\approx0.747. The first sack wins for sure and the second gives 4999\tfrac{49}{99}, so the total is 12(1+4999)\tfrac12\left(1+\tfrac{49}{99}\right). Adding more balls to the first sack only dilutes its certainty for a negligible gain in the second.

Adapted from Joshi, Denson & Downes, Quant Job Interview Questions and Answers, Q8.19, p.277; question and answer rewritten by SelfMadeQuant.com.

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