The following profit payoff table was presented in Problem 1: probabilities for the states of nature are P(s1) 5 0.65, P(s2) 5 0.15, and P(s3) 5 0.20. What is the optimal decision strategy if perfect information were available? What is the expected value for the decision strategy developed in part (a)? Using the expected value approach, what is the recommended decision without perfect information? What is its expected value? What is the expected value of perfect information? decision Alternative d1 d2 State of Nature s1 s2 s3 250 100 25 100 100 75

table. s1. s2. s3

d1 250 100 25

d2. 100 100 75