Solution

ID: past-exam-of-the-probability-statistics-and-options-ii-course-of-the-university-of-oxford/2011/m/m5/a/iv/solution

State zero is absorbing and recurrent. Every positive state is transient: after leaving it, the sticker count strictly decreases until reaching zero and can never return to that positive value. In fact absorption occurs after at most children who take a positive amount. Hence

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