Question: Suppose there is a loss function (0, a) defined by On the basis of an observation x you have to take action a 0

Suppose there is a loss function ℒ (0, a) defined by

a2  0 10 3  10  3.

On the basis of an observation x you have to take action a0, a1 or a2. For what values of the posterior probabilities p0 and p1 of the hypotheses H: θ ∈ Θ0 and H1 : θ∈ Θ1 would you take each of the possible actions?

a2 0 10 3 10 3.

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