Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have a single data-point consisting of a customer who was offered a price of $5 for the product and who declined the offer.

 

You have a single data-point consisting of a customer who was offered a price of $5 for the product and who declined the offer. You are considering two models: A: the probability of acceptance as a function of the price is r(p) = exp(5-p)/(1+ exp(5-p)) B: the probability of acceptance as a function of the price is r(p) = exp(4-p)/(1+ exp(4-p)) Which model maximizes the log-likelihood of the outcome in this data point? What is this log-likelihood? (take the log to the base 10, available on Excel as LOG(number), and approximate the result) O Model B maximizes the log-likelihood and the optimal value is -0.301 O Model B maximizes the log-likelihood and the optimal value is -0.136 O Model A maximizes the log-likelihood and the optimal value is -0.301 O Model B maximizes the log-likelihood and the optimal value is -0.5703

Step by Step Solution

3.34 Rating (148 Votes )

There are 3 Steps involved in it

Step: 1

ANS WER Model A maxim izes the log like lihood and the optimal value is 0 3... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Creating Value in a Dynamic Business Environment

Authors: Ronald W. Hilton

11th edition

125956956X, 978-1259569562

More Books

Students also viewed these Accounting questions

Question

Which of the following fringe benefit

Answered: 1 week ago

Question

Which are the strongest parts?

Answered: 1 week ago

Question

Which character has an opposite script?

Answered: 1 week ago