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Dr. Mac, a surgeon, must decide what mode of treatment to use on Mr. Samuels. There are three modes of treatment: Mode A, B,
Dr. Mac, a surgeon, must decide what mode of treatment to use on Mr. Samuels. There are three modes of treatment: Mode A, B, and C; and three possible states of nature: 1. Treatment succeeds and patient leads a normal life, 2. Patient survives treatment but is permanently disabled, and 3. Patient fails to survive treatment. Dr. Mac has prepared the decision table below. What mode of treatment maximizes the expected value? Treatment Outcome Mode Normal Life Disability Non-Survival A $1,000,000 -$2,000,000-$500,000 P(outcome) .5 2 .3 B $3,000,000 -$2,500,000 -$500,000 P(outcome) .5 3 .2 C $10,000,000-$5,000,000 -$600,000 P(outcome) 4 .4 2
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