Consider a decision problem with two actions,

a, and as, and two states of nature, s. and 5.

Let My denote the payoff corresponding to action

a, and state of nature s. Assume that the probability of occurrence of state of natures, is p. so the probability of state is (1-p).

(a) Show that action

a, is selected by the EMV criterion if p(MM)>(1 - p)(M-Mz)

(b) Hence, show that if

a, is an admissible action, there is some probability, p, for which it will be chosen. However, if

a, is not admissible, it cannot be chosen, whatever the value of p.