Question: Question 1 (1 mark): Consider the following payoff matrix with four decisions & five states of nature. Given payoff matrix A -3 2 2 1

Question 1 (1 mark): Consider the following

Question 1 (1 mark): Consider the following payoff matrix with four decisions & five states of nature. Given payoff matrix A -3 2 2 1 1 3 7 -55 -2 4 1 0 3 1 2 1 4 0 (a) Explain in one short sentence the concept of a dominated decision. Are there any dominated decisions in this example? (b) How would an optimist decide? What is the anticipated payoff? (c) How would a pessimist decide? What is the anticipated payoff? (d) Set up the regret matrix & determine the optimal decision according to the regret criterion. What is the anticipated regret? (e) Given prior probabilities of .1, 2, .2, .4, .1, determine the expected payoffs with Bayess criterion. Which decision would the decision maker choose & what is the expected payoff? (f) What is the expected value of perfect information

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