Question: Given below is a payoff table giving profits for various situations. What is the expected value of perfect information? State 1 State 2 State 3

Given below is a payoff table giving profits for various situations. What is the expected value of perfect information?

State 1 State 2 State 3
Probability 0.4 0.35 0.25
Alternative 1 45 37 83
Alternative 2 16 59 72
Alternative 3 23 65 91

Possible Answers:

a. 7.6

b. 8.4

c. 8.8

d. 9.2

e. 3.0

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