Solved

Three Decision Makers Have Assessed Payoffs for the Following Decision

Question 57

Essay

Three decision makers have assessed payoffs for the following decision problem (payoff in dollars).

 Decision Alternative  State of Nature s1s2s3d1154020d2608080\begin{array} { | c | c | c | c | } \hline { \text { Decision Alternative } } & & { \text { State of Nature } } \\\hline & s 1 & s 2 & s 3 \\\hline d 1 & 15 & 40 & - 20 \\\hline d 2 & 60 & 80 & - 80 \\\hline\end{array}

The indifference probabilities are as follows:  IndifferenceProbability (p) Payoff  Decision Maker A  Decision  Mecision Maker C80 Does not apply  Does not apply  Does not apply 600.70.950.85400.50.90.7150.30.80.55200.150.60.3580 Does not apply  Does not apply  Does not apply \begin{array}{l}\begin{array} { | c c c c | } \hline & { \text { IndifferenceProbability } ( p ) } \\\text { Payoff } & \text { Decision Maker A } & \text { Decision } & \text { Mecision Maker } \mathbf { C } \\\hline 80 & \text { Does not apply } & \text { Does not apply } & \text { Does not apply } \\60 & 0.7 & 0.95 & 0.85 \\40 & 0.5 & 0.9 & 0.7 \\15 & 0.3 & 0.8 & 0.55 \\- 20 & 0.15 & 0.6 & 0.35\\- 80& \text { Does not apply }&\text { Does not apply }&\text { Does not apply }\\\hline\end{array}\\\end{array} If P(s1) = 0.30, P(s2) = 0.55, and P(s3) = 0.15, find a recommended decision for each of the three decision makers.

Correct Answer:

verifed

Verified

For each of the cases, assume that the u...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents