Question

Consider again Techware’s decision problem described in Problem 40. Suppose now that Techware’s utility function of net revenue x (measured in dollars), earned from the given marketing opportunities, is U(x) = 1 – e-x/350000.
a. Find the decision that maximizes Techware’s expected utility. How does this optimal decision compare to the optimal decision with an EMV criterion? Explain any difference between the two optimal decisions.
b. Repeat part a when Techware’s utility function is U(x) = 1 – e-x/350000.



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  • CreatedApril 01, 2015
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