Nick has plans to open some pizza restaurants, but he is not sure how many to open. He has prepared a payoff table to help analyze the situation.
States of Nature

Nick believes there is a 40 percent chance that the market will be good, a 30 percent chance that
it will be fair, and a 30 percent chance that it will be poor. A market research firm will analyze market conditions and will provide a perfect forecast (they provide a money back guarantee).
What is the most that should be paid for this forecast?

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Alternatives Open Open Do Nothing Good Market 380,000 2 200,000 Fair Market 70,000 80,000 Poor Market 400,000 200,000