Explore BrainMass
Share

# Payoff table

A payoff table is given as

s1 s2 s3
d1 10 8 6
d2 14 15 2
d3 7 8 9

a. What decision should be made by the optimistic decision maker?
b. What decision should be made by the conservative decision maker?
c. What decision should be made under minimax regret?
d. If the probabilities of s1, s2, and s3 are .2, .4, and .4, respectively, then what decision should be made under expected value?
e. What is the EVPI?

#### Solution Preview

Hello

Please see all the details below. Thank You.

A payoff table is given as

A payoff table is given as

s1 s2 s3
d1 10 8 6
d2 14 15 2
d3 7 8 9

a. What decision should be made by the optimistic
decision maker?
An optimistic deicsion maker will identify bst of each alternative and out of it he/she will select the maximum.

d1 10
d2 15
d3 9

So optimisitic decision maker will choose alternative 2 with payoff of 15

b. What decision should be made by the conservative
decision maker?
Conservative decision maker will choose worst of each ...

#### Solution Summary

Solution describes the decisions that should be made by different type of decision makers using the payoff table.

\$2.19