Scenario 12.2: Shari needs a kidney, and her two friends, Jerome and Eliza, are both good potential donors. If Shari gets a kidney, she will live and each of her two friends will get 8,000 units of satisfaction. If Shari does not get a kidney, she will die and each of her friends will get no satisfaction. The cost of donating a kidney totals - 6,000 units of satisfaction.
-Refer to Scenario 12.2. The ideal mixed strategy for Eliza has her donating her kidney with ________ probability.

Question

Quizplus · Accepted Answer

The ideal mixed strategy involves balancing the expected satisfaction from donating and not donating. If Eliza donates, she gains 8,000 - 6,000 = 2,000 units of satisfaction. If she doesn't donate, she gains 0. To make her indifferent, the probability should be such that the expected satisfaction from both actions is equal. Solving for this probability gives 25%.