Nick uses the equally likely criterion

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Reference no: EM1316184

Decision making using expected payoff.

Nick has plans to open some pizza restaurants, but he is not sure how many to open .He has prepared a payoff table to help analyze the situation.

	States of Nature
	Market
Alternative	GOOD	FAIR	POOR
Open 1	380,000	70,000	-400,000
Open 2	200,000	80,000	-200,000
Do Nothing	0	0	0

As Nick does not know how his received, he assumes that all three states of nature are equally likely to occur. If he uses the equally likely criterion, what decision would he make?

Reference no: EM1316184

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