The Local Operations Manager for the IRS Must Decide Whether

question 10

Short Answer

The local operations manager for the IRS must decide whether to hire one, two, or three temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. $$\begin{array} { c c c c } \text { \# of Workers } & \begin{array} { c } \text { Low } \\\text { Compliance }\end{array} & \begin{array} { c } \text { Medium } \\\text { Compliance }\end{array} & \begin{array} { c } \text { High } \\\text { Compliance }\end{array} \\\hline 1 & 50 & 50 & 50 \\2 & 100 & 60 & 20 \\3 & 150 & 70 & - 10 \\\hline\end{array}$$
If he uses the minimax regret criterion, how many new workers will he hire?

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Definitions:

Misinformation Effect

A memory distortion phenomenon where post-event information alters a person’s recollection of the original event.

First Impressions

The initial perceptions or judgments formed about someone or something at the first encounter.

Memory

The cognitive process involving the encoding, storing, and retrieving of information over time.

Encoding

The method of transforming data into a format that can be retained in memory storage.