Question
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives State of Nature Decision Alternative
- The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives
State of Nature
Decision Alternative 1. State_nature_one 2. State_nature_two
Decision_one 1. 250 2. 100
Decision_two 1. 100 2. 100
Suppose P(s1)=0.2 and P(s2)=0.8. What is the best decision using the expected value approach?
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Basic Economics
Authors: Frank V. Mastrianna
16th edition
1111826641, 978-0357706664, 978-1111826642
