For the Payoff Table Below,the Decision Maker Will Use P(s₁)=

question 42

Essay

For the payoff table below,the decision maker will use P(s₁)= .15,P(s₂)= .5,and P(s₃)= .35.

a.What alternative would be chosen according to expected value?
b.For a lottery having a payoff of 40,000 with probability p and -15,000 with probability (1-p),the decision maker expressed the following indifference probabilities.

Let U(40,000)= 10 and U(-15,000)= 0 and find the utility value for each payoff.
c.What alternative would be chosen according to expected utility?

---

Definitions:

Night's Sleep

The period of rest, typically at night, during which an individual refrains from wakefulness and engages in a natural state of unconsciousness.

REM Sleep

A phase of sleep characterized by rapid eye movements, low muscle tone, and vivid dreams, playing a critical role in learning and memory.

Dreaming

Thoughts, visuals, and emotional sensations that occur in one's mind during the state of sleep.

Stage 1 Sleep

The initial phase of the sleep cycle, characterized by light sleep, where one can be easily awakened and may experience sudden muscle contractions.