Thanksgiving indecision Suppose you are contemplating whether to go home for Thanksgiving. You would like to see
Question:
Thanksgiving indecision Suppose you are contemplating whether to go home for Thanksgiving. You would like to see your family, but you are worried that your aunt may be there, and you genuinely hate your aunt. If you stay in town you are hoping to stay with your roommate, but then again, there is some chance that she will leave town. The probability that your aunt shows up is 1/4, and the probability that your roommate leaves town is 1/3. The utility of celebrating Thanksgiving with your family without the aunt is 12 and with the aunt is minus two. The utility of staying in your dorm without your roommate is three and with the roommate is nine.
(a) Draw a decision tree.
(b) Calculate the expected utility of going home and of staying in town.
(c) What should you do?
Step by Step Answer:
A Course In Behavioral Economics
ISBN: 9781352010800,9781352010817
3rd Edition
Authors: Erik Angner