A decision maker who is considered to be a risk taker is faced with this set of probabilities and payoffs $$\begin{array} { c | ccc }
& { \text { State of Nature } } \
\text { Decision } & \mathrm { s } _ { 1 } & \mathrm {~s} _ { 2 } & \mathrm {~s} _ { 3 } \
\hline \mathrm { d } _ { 1 } & 5 & 10 & 20 \
\mathrm {~d} _ { 2 } & - 25 & 0 & 50 \
\mathrm {~d} _ { 3 } & - 50 & - 10 & 80 \
\hline \text { Probability } & .30 & .35 & .35
\end{array}$$ Rank the decision alternatives on the basis of expected value.

Question

A decision maker who is considered to be a risk taker is faced with this set of probabilities and payoffs $$\begin{array} { c | ccc } 
&  { \text { State of Nature } } \
\text { Decision } & \mathrm { s } _ { 1 } & \mathrm {~s} _ { 2 } & \mathrm {~s} _ { 3 } \
\hline \mathrm { d } _ { 1 } & 5 & 10 & 20 \
\mathrm {~d} _ { 2 } & - 25 & 0 & 50 \
\mathrm {~d} _ { 3 } & - 50 & - 10 & 80 \
\hline \text { Probability } & .30 & .35 & .35
\end{array}$$ Rank the decision alternatives on the basis of expected value.

Quizplus · Accepted Answer

The Answer of A decision maker who is considered to be a risk taker is faced with this set of probabilities and payoffs $$\begin{array} { c | ccc } 
&  { \text { State of Nature } } \
\text { Decision } & \mathrm { s } _ { 1 } & \mathrm {~s} _ { 2 } & \mathrm {~s} _ { 3 } \
\hline \mathrm { d } _ { 1 } & 5 & 10 & 20 \
\mathrm {~d} _ { 2 } & - 25 & 0 & 50 \
\mathrm {~d} _ { 3 } & - 50 & - 10 & 80 \
\hline \text { Probability } & .30 & .35 & .35
\end{array}$$ Rank the decision alternatives on the basis of expected value.

A Decision Maker Who Is Considered to Be a Risk