Steven Moffat is a TV writer and producer with a string of recent hits, and he has been working on a new script titled "Inspector Space Time." He is considering producing a pilot for the series and showing it to executives from the Syfy Channel. The executives may decide to reject the series, buy rights to show it for one year, or buy rights to show it for two years. Given his recent success, Moffat estimates that the most likely outcome is a two-year contract (probability = 0.5). The probability of him receiving a one-year contract is 0.3 and the probability of a rejection is 0.2. If Moffat decides to produce the pilot himself, it would cost him $100,000 to do so. If the network rejects the pilot, he would lose all of this initial investment. The network would pay him $150,000 for a one-year contract and $250,000 for a two-year contract. Instead of producing the pilot himself, he can just write the script and sell it to another production company. He has received an offer of $100,000 from his competitor, R.T. Davies productions. If Moffat sells, Davies would own the script and all production rights, regardless of the network

a. Construct a payoff table and help Steven Moffat make a decision based on expected values.

b. Moffat has a friend, Mark Gatiss, who works at Syfy and can tell him what the executives will decide by just looking at the script. He doesn't feel comfortable with asking his friend for a favor, so he would like to pay for this additional information. How much would Moffat be willing to pay Gatiss for his help?