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2. Now consider sites A and B. Like site A, site B would cost $4U million to drill, with the same assessment of the outcomes:
2. Now consider sites A and B. Like site A, site B would cost $4U million to drill, with the same assessment of the outcomes: a 23% chance ofa yalue of$lo million (wet) and an 813% chance of $0 (day). Because of the similarities between the two locations, the outcomes at the two sites are not probabilistically independent. In particular, if you knew that site A were wet, that information would change your assessment of the probability that B is wet from 2D% to sass. Similarly, if you knew that A were dry, that information would change yotu' assessment of the probability that B is wet from Ems\": to 1 913. Should you drill one, both, or neither of these sites?l Ignoring the possibility of doing the seismic test, what is the optimal drilling strategy?r How does the optimal decision change as the \"wet" probability at site A changes
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