A medical doctor is involved in a $1 million malpractice suit. He can either settle out of court for $250,000 or go to court. If he goes to court and loses, he must pay $825,000 plus $175,000 in court costs. If he wins in court the plaintiffs pay the court costs. Which of the following would be the most appropriate analysis to perform?

Question

Quizplus · Accepted Answer

Setting up a payoff table would allow for a comparison of the expected value of settling out of court versus going to court, taking into account the probabilities of winning or losing the case. This would enable the doctor to make an informed decision about which option is the most financially beneficial. ANOVA, multiple linear regression, and coefficient of variation are not relevant for this scenario.

A Medical Doctor Is Involved in a $1 Million Malpractice