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You may wonder, what you have bought

An explanation may be found here

The index is the fair price for a service for you, given your knowledge of the service and your discount factor. Your knowledge is the history - the number of your successes and failures of the service. The price is measured in a unit, where a failure has value nought, and a succes has value unity.


The discount factor

Getting a succes next time, the service is tried, does have a value. Not the same as getting a succes this time, but maybe 90% of it. Then you discount factor is 90%

You may have found a good service, 2 successes against 1 failure. It may, however, proove advantageous to try a new service, so that you eventually may find a better one. How high your discount factor be, for this to be the case?

To solve this, compare the Gittins indices for 0 successes and 0 failures with the ones for 2 successes and 1 failure for various high discount factors.

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