Question
A professor has developed a payoff table that indicates the payoffs associated with a set of alternatives under two possible states of nature. Tenure Fired
A professor has developed a payoff table that indicates the payoffs associated with a set of alternatives under two possible states of nature.
| Tenure | Fired | |
| Teach at another university | $120,000 | $20,000 |
| Apply for the dean's job | $40,000 | $180,000 |
| Go into industry | $30,000 | $250,000 |
Compute the expected value of perfect information assuming that the probability of being fired is equal to 0.4.
| A | EVPI = $54,000 | |
| B | EVPI = $64,000 |
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Technology And Finance Challenges For Financial Markets Business Strategies And Policy Makers
Authors: Morten Balling, Frank Lierman, Andy Mullineux
1st Edition
041529827X, 978-0415298278
