Question

Problem 13-29 (Algorithmic) Three decision makers have assessed utilities for the following decision problem (payoff in dollars): State of Nature Decision Alternative S1 S2 S3 d1 30 50 -30 d2 80 110 -100 The indifference probabilities are as follows: Indifference Probability (p) Payoff Decision maker A Decision maker B Decision maker C 110 1.00 1.00 1.00 80 0.95 0.80 0.85 50 0.85 0.70 0.75 30 0.75 0.55 0.60 -30 0.60 0.25 0.50 -100 0.00 0.00 0.00 Find a recommended decision for each of the three decision makers, if P(s1) = 0.15, P(s2) = 0.60, and P(s3) = 0.25. (Note: For the same decision problem, different utilities can lead to different decisions.) If required, round your answers to two decimal places. Decision maker A EU(d1) = EU(d2) = Recommended decision: Decision maker B EU(d1) = EU(d2) = Recommended decision: Decision maker C EU(d1) = EU(d2) = Recommended decision:

Answer 1