Question: For the payoff table below, the decision maker will use P(81)=2, P(82) = .3. State of Nature Decision $1 --5000 -15,000 52 1500 di 53

For the payoff table below, the decision maker will use P(81)=2, P(82) = .3. State of Nature Decision $1 --5000 -15,000 52 1500 di 53 10,000 40,000 d2 -2500 8. What alternative would be chosen according to expected value? For a lottery having a payoff of 40,000 with probability p and -15,000 with probability (1-P), the decision maker expressed the following indifference probabilities. Payoff Probability 10.000 .85 1500 .60 -2500 .53 -5000 .50 Let U (40.000) = 10 and U (-15,000) = 0 b. Complete the utility table. c What alterative would be chosen according to expected utility

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