The

following profit payoff table was presented in Problem 1:

SELF

test

Decision Alternative

d1 d2

State of Nature

s1 s2 s3 250 100 25 100 100 75

The probabilities for the states of nature are P(s1) 0.65, P(s2) 0.15, and P(s3) 0.20.

a. What is the optimal decision strategy if perfect information were available?

b. What is the expected value for the decision strategy developed in part (a)?

c. Using the expected value approach, what is the recommended decision without per-

fect information? What is its expected value?

d. What is the expected value of perfect information?