So with each bounce the radiance of each photon should decrease which means there should be an optimal number of bounces where adding more bounces doesn't noticeably increase the quality of the image. Is finding this limit just a matter of trial and error and eyeballing it or can we predict the optimal number of bounces ahead of time?
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My understanding is that Russian roulette tries to solve this problem by estimating the contribution of each path and discarding it with high probability if the contribution is low. This figures out the decrease in radiance you mention by taking into account the number of bounces and the BSDF of the surface at each bounce in the estimation of a path's potential contribution. Doing this on a per-sample basis rather than globally across the whole scene makes sense because some parts of the scene will require more bounces than others (look e.g. at the lamp at the top of the picture--it requires four bounces to even appear transparent, whereas the rest of the scene looks reasonably good even with two).
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