A Payoff Table Is Given As AWhat Decision Should Be Made by the Optimistic Decision Maker

question 40

Essay

A payoff table is given as $$\begin{array} { c | cc c } & &{ \text { State of Nature } } \\\text { Decision } &s1&s1&s3\\\hlined_{1} & 10 & 8 & 6 \\d_{2} & 14 & 15 & 2 \\d_{3} & 7 & 8 & 9\end{array}$$
a.What decision should be made by the optimistic decision maker?
b.What decision should be made by the conservative decision maker?
c.What decision should be made under minimax regret?
d.If the probabilities of s₁, s₂, and s₃ are .2, .4, and .4, respectively, then what decision should be made under expected value?
e.What is the EVPI?

---

Definitions:

Learning Organisation

Continuously changes and improves using the lessons of experience.

Continuous Adaptation

The ongoing process of making adjustments and changes to respond to the environment or circumstances effectively.

Innovation

The introduction of new ideas, products, services, or processes that add value or improve upon existing norms.

Organic Design

A type of organizational design that is flexible, adaptable, and characterized by less formal rules and procedures to encourage innovation and creativity.