Find the Expected value of the perfect information for the given problem.
Given the following cost tree, what is the expected outcome?
|
5
|
$1,000
|
|
0.3
|
$500
|
|
0.2
|
($300)
|
|
0.2
|
$1,500
|
|
0.8
|
$300
|
Optimistic decision from the given information.
The following is a payoff table giving profits for various situations.
|
|
Status of Nature
|
|
|
A
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B
|
C
|
|
Alternative 1
|
120
|
140
|
120
|
|
Alternative 2
|
200
|
100
|
50
|
|
Alternative 3
|
100
|
120
|
180
|
|
Do nothing
|
0
|
0
|
0
|
What decision would an optimist make?