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PROBLEM 1. For the payoff table below, the decision maker will use the following pprobabilities for the state of nature: P(s1) = 0.15, P(s2) =
PROBLEM 1. For the payoff table below, the decision maker will use the following pprobabilities for the state of nature: P(s1) = 0.15, P(s2) = 0.5, and P(s3) = 0.35. State of Nature Decision Alternative S1 S2 S3 d1 5,000 1,000 10,000 d2 -15,000 2,000 40,000 The decision maker expressed the following indifference probabilities. Payoff Probability 40,000- 10,000 0.85 1,000 0.60 2,000 0.53 -5,000 0.50 -15,000 Make a decision using the Expected Utility Approach. (Show your complete solution)
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