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Three decision makers have assessed utilities for the following decision problem (payoff in dollars): State of...
Three decision makers have assessed utilities for the following decision problem (payoff in dollars): State of Nature Decision Alternative S1 S2 S3 d1 10 60 -20 d2 90 100 -80 The indifference probabilities are as follows: Indifference Probability (p) Payoff Decision maker A Decision maker B Decision maker C 100 1.00 1.00 1.00 90 0.95 0.80 0.85 60 0.85 0.70 0.75 10 0.75 0.55 0.60 -20 0.60 0.25 0.50 -80 0.00 0.00 0.00 Find a recommended decision for each of the three decision makers, if P(s1) = 0.30, P(s2) = 0.55, and P(s3) = 0.15. (Note: For the same decision problem, different utilities can lead to different decisions.) If required, round your answers to two decimal places. Decision maker A EU(d1) = _______ EU(d2) = _______ Recommended decision: _______ Decision maker B EU(d1) = _______ EU(d2) = _______ Recommended decision: _______ Decision maker C EU(d1) = _______ EU(d2) = _______ Recommended decision: _______
Solutions
milcah answered 1 year agoRelated Solutions
Three decision makers have assessed utilities for the following decision problem (payoff in dollars): State of...
Three decision makers have assessed utilities for the following
decision problem (payoff in dollars):
State of Nature
Decision Alternative
S1
S2
S3
d1
10
50
-20
d2
90
110
-100
The indifference probabilities are as follows:
Indifference Probability (p)
Payoff
Decision maker A
Decision maker B
Decision maker C
110
1.00
1.00
1.00
90
0.95
0.80
0.85
50
0.85
0.70
0.75
10
0.75
0.55
0.60
-20
0.60
0.25
0.50
-100
0.00
0.00
0.00
Find a recommended decision for each of...
Problem 13-29 (Algorithmic) Three decision makers have assessed utilities for the following decision problem (payoff in...
Problem 13-29 (Algorithmic)
Three decision makers have assessed utilities for the following
decision problem (payoff in dollars):
State of Nature
Decision Alternative
S1
S2
S3
d1
10
40
-30
d2
90
110
-80
The indifference probabilities are as follows:
Indifference Probability (p)
Payoff
Decision maker A
Decision maker B
Decision maker C
110
1.00
1.00
1.00
90
0.95
0.80
0.85
40
0.85
0.70
0.75
10
0.75
0.55
0.60
-30
0.60
0.25
0.50
-80
0.00
0.00
0.00
Find a recommended decision...
The following payoff table shows profit for a decision analysis problem with two decision alternatives and...
The following payoff table shows profit for a decision analysis
problem with two decision alternatives and three states of
nature.
Decision
Alternative
States of Nature
s1
s2
s3
d1
240
90
15
d2
90
90
65
Suppose that the decision maker obtained the probabilities
P(s1) = 0.65,
P(s2) = 0.15,
and
P(s3) = 0.20.
Use the expected value approach to determine the optimal
decision.
EV(d1) = EV(d2) = The
optimal decision is ? d₁ d₂
The following payoff table shows the profit for a decision problem with two states of nature...
The following payoff table shows the profit for a decision
problem with two states of nature and two decision
alternatives:
State of Nature
Decision Alternative
s1
s2
d1
10
1
d2
7
3
(a)
Suppose P(s1)=0.2 and
P(s2)=0.8. What is the best decision
using the expected value approach? Round your answer in one decimal
place.
The best decision is decision alternative (- Select
your answer -d1 /d2) with an expected value of.
(b)
Perform sensitivity analysis on the payoffs for...
Develop the hierarchy of decision makers in an investigation to solve a management problem where you...
Develop the hierarchy of decision makers in an investigation to
solve a management problem where you or someone you know is the
manager of the company.
The following is a payoff matrix showing profit in millions of dollars when two companies simultaneously...
The following is a payoff matrix showing profit in millions of
dollars when two companies simultaneously decide on various
advertising budgets ($1 million, $2 million, or $3 million):
Blank for Formatting
Pizza Hut Advertising Budget: $1 mill
Pizza Hut Advertising Budget: $2 mill
Pizza Hut Advertising Budget: $3 mill
Papa John's Advertising Budget: $1 mill
$225/$175
$215/$185
$210/$180
Papa John's Advertising Budget: $2 mill
235/165
210/170
205/175
Papa John's Advertising Budget: $3 mill
215/155
205/160
200/165
QUESTION:
What would be...
You are given the following payoff table with profits (in $). Decision Alternative States of Nature...
You are given the following payoff table with profits
(in $).
Decision
Alternative
States of Nature
s1
s2
d1
1000
3000
d2
4000
500
Assume the following probability information is given,
where I1 and I2 are the outcomes of the sample information
available:
P(s1) = 0.45;
P(I1 | s1) = 0.7;
P(I2 | s1) = 0.3
P(s2) = 0.55;
P(I1 | s2) = 0.6;
P(I2 | s2) = 0.4
[2] Find the values of P(I1) and P(I2).
[2] Determine the...
Which of the following decision measures should capital budgeting decision makers consider? a. discounted payback b....
Which of the following decision measures should capital
budgeting decision makers consider? a. discounted payback b. NPV c.
IRR d. MIRR e. Although NPV is considered the most important method
in the decision process, the other measures can provide different
relevant information that is useful to the process and thus should
be used when appropriate
The following is a payoff table giving costs for various situations. What decision would an optimist...
The following is a payoff table giving costs for various
situations. What decision would an optimist make?
State 1
State 2
State 3
Alternative 1
45
37
83
Alternative 2
16
59
72
Alternative 3
23
65
91
Alternative 4
44
33
55
QUESTION 35 Which is the recommend decision alternative using the conservative approach? Use the following payoff...
QUESTION 35
Which is the recommend decision alternative using the
conservative approach?
Use the following payoff table for a maximization problem.
Decision Alternative
State of nature 1
State of nature 2
D1
6
7
D2
–2
2
D3
2
–3
D4
10
4
a.
D1
b.
D2
c.
D3
d.
D4
e.
None of the above
1.5 points
QUESTION 36
You would like to invest in one of the three available
investment plans: money market, bonds, or stocks. The...
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