Question 2 Your favorite sports team acquired a player last season that they thought would improve...

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Question 2 Your favorite sports team acquired a player last season that they thought would improve the roster, but so far the fit has not worked out well. The team's general manager is considering trading the player, either now at the start of the season or at the trade deadline, which is midway through the season. There is a deal on the table now to trade the player for decent players in return, and the coaching staff estimates that this trade would add 5 wins to the season. However, it may be possible that if the team waits until the trade deadline, the player's skills may improve or may not improve, and the overall trade market could also either worsen or improve. If the player does not improve, or if the market conditions worsen, a trade will not be possible, and thus the player must stay on the roster for the remainder of the season. If the player does not improve, the coaching staff estimates this will cost 5 wins. If the player improves but is not traded, the staff estimates this will add 5 wins. Finally, if the player improves and the market conditions improve, then the team could decide to do a trade that would add 15 wins or instead decide to keep the player. However, the trade available at the start of the season will not be available at the trade deadline. They estimate a 50% chance the player improves, and, independently, an 80% chance the market improves. a) If at the trade deadline the player improves and the market conditions also improve, should the team trade the player or keep the player? (3 points) b) Should the team trade the player now, or keep the player until the trade deadline and reassess then? (7 points) c) The coaching staff has determined that they are actually not sure what the chances are that the player improves. What is the lowest chance of the player improvement the team can handle while wanting to keep the player for now? (5 points) d) A few games into the season, it is clear that there will be a good trade market. That is, the coaching staff now estimate a 100% probability of the market improving. How does this change the decision from (c)? (5 points) Question 2 Your favorite sports team acquired a player last season that they thought would improve the roster, but so far the fit has not worked out well. The team's general manager is considering trading the player, either now at the start of the season or at the trade deadline, which is midway through the season. There is a deal on the table now to trade the player for decent players in return, and the coaching staff estimates that this trade would add 5 wins to the season. However, it may be possible that if the team waits until the trade deadline, the player's skills may improve or may not improve, and the overall trade market could also either worsen or improve. If the player does not improve, or if the market conditions worsen, a trade will not be possible, and thus the player must stay on the roster for the remainder of the season. If the player does not improve, the coaching staff estimates this will cost 5 wins. If the player improves but is not traded, the staff estimates this will add 5 wins. Finally, if the player improves and the market conditions improve, then the team could decide to do a trade that would add 15 wins or instead decide to keep the player. However, the trade available at the start of the season will not be available at the trade deadline. They estimate a 50% chance the player improves, and, independently, an 80% chance the market improves. a) If at the trade deadline the player improves and the market conditions also improve, should the team trade the player or keep the player? (3 points) b) Should the team trade the player now, or keep the player until the trade deadline and reassess then? (7 points) c) The coaching staff has determined that they are actually not sure what the chances are that the player improves. What is the lowest chance of the player improvement the team can handle while wanting to keep the player for now? (5 points) d) A few games into the season, it is clear that there will be a good trade market. That is, the coaching staff now estimate a 100% probability of the market improving. How does this change the decision from (c)? (5 points)

Answer rating: 100% (QA)

a If at the trade deadline the player improves and the market conditions also improve the team should trade the player In this scenario the team has the opportunity to make a trade that would add 15 w... View the full answer