A Decision Maker's Worst Option Has an Expected Value of $1,000

question 7

Multiple Choice

A decision maker's worst option has an expected value of $1,000, and her best option has an expected value of $3,000. With perfect information, the expected value would be $5,000. The decision maker has discovered a firm that will, for a fee of $1,000, make her position-risk free. How much better off will her firm be if she takes this firm up on its offer?

• A)$5,000
• B)$4,000
• C)$3,000
• D)$2,000
• E)$1,000

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Definitions:

Competitive Style

A conflict management strategy characterized by a high concern for self-interest and low concern for the interests of others.

Task Oriented

Describes an approach or behavior that is focused primarily on completing tasks, achieving goals, and maintaining productivity.

Creative

Exhibiting the ability to produce original, innovative ideas or outcomes.

Other Person's Perspective

The viewpoint or position from which another person sees or considers a situation or problem.