Uncertainty

- Choose the course of action that generates the greatest gpected value Suppose you are bidding on a contract that will generate $100,000 in revenue. - If you are successfully, your net earnings will equal $100,000 bid. - The probability that your bid is successful is bid/ 100,000 - To maximize expected earnings, you should bid: a) 25,000 b) 50,000 c) 75,000 d) 90,000