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The following payoff table shows costs that would be incurred based on the decision (DA or DB) and the future unknown states of nature (S1,
The following payoff table shows costs that would be incurred based on the decision (DA or DB) and the future unknown states of nature (S1, S2, S3). Which decision would a conservative decision maker opt for?
Future State S1 | Future State S2 | Future State S3 | |
Decision DA | $400 | $800 | $1,000 |
Decision DB | $200 | $400 | $1,500 |
a) DA
b) DB
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