Question: =9.7.* Consider a decision analysis problem whose payoffs (in units of thousands of dollars) are given by the following payoff table: State of Nature Alternative

=9.7.* Consider a decision analysis problem whose payoffs (in units of thousands of dollars) are given by the following payoff table:

State of Nature Alternative S1 S2 A1 80 25 A2 30 50 A3 60 40 Prior probability 0.4 0.6

a. Which alternative should be chosen under the maximax criterion?

b. Which alternative should be chosen under the maximin criterion?

c. Which alternative should be chosen under the maximum likelihood criterion?

d. Which alternative should be chosen under Bayes’ decision rule?

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