Question: QUESTION 7: Utility and Game theory (14 POINTS) For the payoff table below, the decision maker will use P(51) = 0.15, Ps2)=0.5, and P(53)=0.35. Decision
QUESTION 7: Utility and Game theory (14 POINTS) For the payoff table below, the decision maker will use P(51) = 0.15, Ps2)=0.5, and P(53)=0.35. Decision d1 d2 s1 -5000 -15,000 s2 1000 -2000 State of Nature s3 10,000 40,000 a) What alternative would be chosen according to expected value (EV)? b) Let U (40,000) = 10 and U (-15,000) = 0 and find the utility value for each payoff. What alternative would be chosen according to expected utility (EU)
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