Question: In Example 9 . 2 , a technological failure implies that the game is over the product must be abandoned. Change the problem so that
In Example a technological failure implies that
the game is overthe product must be abandoned.
Change the problem so that there are two levels of
technological failure, each with probability In the
first level, Acme can pay a further development cost D
to fix the product and make it a technological success.
Then it can decide whether to market the product.
In the second level, the product must be abandoned.
Modify the decision tree as necessary. Then answer
the following questions.
a For which values of D should Acme fix the product
and then market it given that the first level of
technological failure occurs?
b For which values of D is Acmes best first decision
still to continue development
c Explain why these two questions are asking differ
ent things and can have different answers.
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