A Decision Maker Who Is Considered to Be a Risk

question 12

Essay

A decision maker who is considered to be a risk taker is faced with this set of probabilities and payoffs $$\begin{array} { c | ccc } & { \text { State of Nature } } \\\text { Decision } & \mathrm { s } _ { 1 } & \mathrm {~s} _ { 2 } & \mathrm {~s} _ { 3 } \\\hline \mathrm { d } _ { 1 } & 5 & 10 & 20 \\\mathrm {~d} _ { 2 } & - 25 & 0 & 50 \\\mathrm {~d} _ { 3 } & - 50 & - 10 & 80 \\\hline \text { Probability } & .30 & .35 & .35\end{array}$$ Rank the decision alternatives on the basis of expected value.

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Definitions:

Extended Phenotype

Extended phenotype refers to the idea that the phenotype of an organism should not be limited to the biological processes occurring within the organism itself, but should also include the effects that the organism has on its environment, including other organisms.

Organism

A living entity that can grow, reproduce, metabolize, respond to stimuli, and maintain homeostasis.

Constructed Structure

Man-made buildings or edifices created for specific purposes, ranging from residential, commercial, to infrastructural uses.

Noticeable Effect

An observable or measurable impact resulting from a specific action or phenomenon.