A Payoff Table, the Prior Probabilities for Two States of Nature

question 25

Essay

A payoff table, the prior probabilities for two states of nature, and the likelihood probabilities are shown below.
Payoff Table: $\begin{array}{ll}&\text { Alternative }\\\text { State of Nature }&\quad a_1\quad\quad a_2\quad\quad a_3\\\begin{array}{ll}s_1\\s_2\end{array}&\begin{array}{|lll|}\hline 20\quad&28\quad&33\quad \\32&29&25\\\hline\end{array}\end{array}$
Prior Probabilities:
P( $s _ { 1 }$ ) = 0.4, P( $S _ { 2 }$ ) = 0.6.
Likelihood Probabilities: $\begin{array}{ll}&\quad I_1\quad\quad I_2\\\begin{array}{ll}s_1\\s_2\end{array}&\begin{array}{|ll|}\hline 0.95 & 0.05 \\0.08 & 0.92 \\\hline\end{array}\end{array}$
a. Determine the EMV decision.
b. Set up the opportunity loss table.
c. Determine the EOL decision.
d. What is the expected payoff with perfect information?
e. What is the expected value of perfect information?

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Definitions:

Sexual Harassment

Unwelcome or inappropriate sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature in a workplace, or other professional or social situations.

Gender Differences

Refers to the distinctions, whether real or perceived, in attributes, behaviors, interests, and roles typically associated with being male or female.

Heterosexism

A belief system that values heterosexual orientation as superior, often leading to discrimination against non-heterosexual individuals.

Gay Men

Men who are romantically and sexually attracted to other men.