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For the Payoff Table Below, the Decision Maker Will Use

Question 42

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For the payoff table below, the decision maker will use P(s1) = .15, P(s2) = .5, and P(s3) = .35.  State of Nature  Decision s1s2 s3d15,0001,00010,000d215,0002,00040,000\begin{array} { c | r r c } &{ \text { State of Nature } } \\\text { Decision } & { \mathrm { s } _ { 1 } } & { \mathrm { s } _ { 2 } } & \mathrm {~s} _ { 3 } \\\hline d _ { 1 } & - 5,000 & 1,000 & 10,000 \\d _ { 2 } & - 15,000 & - 2,000 & 40,000\end{array} What alternative would be chosen according to expected value?

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EV(d1) = 32...

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