Question: help me solve the problem no hand solution please 13.15 Of course, Liedtke is not operating by himself in the Texaco-Pennzoil case; he must re-
help me solve the problem no hand solution please


13.15 Of course, Liedtke is not operating by himself in the Texaco-Pennzoil case; he must re- port to a board of directors. Table 13.6 gives utility functions for three different directors. Draw graphs of these. How would yen classify each director in terms of his or her atti- tude toward risk? What would be the strategies of each? (That is, what would each one do with respect to Texaco's current offer, and how would each react to a Texaco counteto'er of $3 billion? To answer this question, you must solve the decision treebcalculate ex~ pected utilitieafor each director.) Table 13.6 Utility functions for - Utility . - three Pennzoil Payoff Director A Director 6 Director C directors. 10.3 3.1) 100 42.05 5.0 ' 2.9 - 30 23.50 3.0 2.3 ' 15 16.50 2.0 2.6 8 13.00 0.0 1.0 0 6.00 Settlement Amount ($ Billion) Accept $2 Billion 2 Texaco Accepts $5 Billion 5 (0.17) (0.2) 10.3 Final Court (0.5) 5 Counteroffer Texaco Refuses Decision $5 Billion (0.3) Counteroffer 0 (0.50) (0.2) 10.3 Texaco Final Court (0.5) Counteroffers 5 $3 Billion Decision Refuse (0.3) (0.33) 0 Accept $3 Billion 3
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