A payoff table is given as s 1 s 2 s 3 d 1 250 450 500 d 2 300 250 900 d 3 400 500 800 In each part of your answer, show the work you relied upon to reach your answer What decision should be made using expected value, in which the probabilities are s 1 3, s 2 2, s 3 5 What decision should be made by the conservative decision maker What choice should be made using the Hurwicz method, in which the coefficient of optimism (or realism) is 6 (hint ignore the middle state of nature in performing the calculation)

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Question: A payoff table is given as s 1 s 2 s 3 d 1 250 450 500 d 2 300 -250 900 d 3 400

A payoff table is given as

	s₁	s₂	s₃
d₁	250	450	500
d₂	300	-250	900
d₃	400	500	800

In each part of your answer, show the work you relied upon to reach your answer.

What decision should be made using expected value, in which the probabilities are s₁=.3, s₂=.2, s₃=.5?

What decision should be made by the conservative decision-maker?

What choice should be made using the Hurwicz method, in which the coefficient of optimism (or realism) is .6? (hint: ignore the middle state of nature in performing the calculation).

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