A payoff table is shown below. $\begin{array} { ccc }
&\text { Alternative }\
\text { State of Nature }& a_{1} & a_{2} & a_{3}\
s_{1} & 21 & 8 & -3 \
s_{2} & 12 & 12 & 7 \
s_{3} & -15 & 9 & 13
\end{array}$
The following prior probabilities are assigned to the states of nature:
P( $S _ { 1 }$ ) = 0.2, P( $S _ { 2 }$ ) = 0.7, P( $S _ { 3 }$ ) = 0.1.
a. Determine the EMV decision.
b. Set up the opportunity loss table.
c. Determine the EOL decision.
d. What is the expected payoff with perfect information?
e. What is the expected value of perfect information?

Question

A payoff table is shown below. $\begin{array} { ccc  }
&\text { Alternative }\
\text { State of Nature }& a_{1} & a_{2} & a_{3}\
s_{1} & 21 & 8 & -3 \
s_{2} & 12 & 12 & 7 \
s_{3} & -15 & 9 & 13
\end{array}$
 The following prior probabilities are assigned to the states of nature:
P( $S _ { 1 }$ ) = 0.2, P( $S _ { 2 }$ ) = 0.7, P( $S _ { 3 }$ ) = 0.1.
a. Determine the EMV decision.
b. Set up the opportunity loss table.
c. Determine the EOL decision.
d. What is the expected payoff with perfect information?
e. What is the expected value of perfect information?

Quizplus · Accepted Answer

The Answer of A payoff table is shown below. $\begin{array} { ccc  }
&\text { Alternative }\
\text { State of Nature }& a_{1} & a_{2} & a_{3}\
s_{1} & 21 & 8 & -3 \
s_{2} & 12 & 12 & 7 \
s_{3} & -15 & 9 & 13
\end{array}$
 The following prior probabilities are assigned to the states of nature:
P( $S _ { 1 }$ ) = 0.2, P( $S _ { 2 }$ ) = 0.7, P( $S _ { 3 }$ ) = 0.1.
a. Determine the EMV decision.
b. Set up the opportunity loss table.
c. Determine the EOL decision.
d. What is the expected payoff with perfect information?
e. What is the expected value of perfect information?

A Payoff Table Is Shown Below The Following Prior Probabilities Are Assigned to the States of }&\text

A Payoff Table Is Shown Below The Following Prior Probabilities Are Assigned to the States of }
&\text