What is the expected value of perfect information, Mathematics

Assignment Help:

Question:

The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.

1544_What is the expected value of perfect information.png

(a) Construct a decision tree for this problem.

(b) If the decision maker knows nothing about the probabilities of the three states of nature, what is the recommended decision using the optimistic, pessimistic and minimax regret approaches?

(c) Suppose that the decision maker has obtained the probability assessments: P(S1) =0:65, P(S2) = 0:15, and P(S3) = 0:20.

(1) Use the expected value approach to determine the optimal decision.

(2) What is the optimal decision strategy if perfect information were available?

(3) What is the expected value for the decision strategy developed in part (2)?

(4) Using the expected value approach, what is the recommended decision without perfect information? What is the expected value?

(5) What is the expected value of perfect information?


Related Discussions:- What is the expected value of perfect information

Eqt.., pam bought a new bedroom suit for $2588.she me a down payment of $18...

pam bought a new bedroom suit for $2588.she me a down payment of $188 and paid the remaining amount in 24 equal monthly payments .how much did she pay for each monthly payment.

Mathematical sequences, The number of seats in each row can be modeled by t...

The number of seats in each row can be modeled by the formula C_n = 16 + 4n, when n refers to the nth row, and you need 50 rows of seats. (a) Write the sequence for the numb

Division, Before taking up division of polynomials, let us acquaint...

Before taking up division of polynomials, let us acquaint ourselves with some basics. Suppose we are asked to divide 16 by 2. We know that on dividing 16 by

Prove the parallelogram circumscribing a circle is rhombus, Prove that the ...

Prove that the parallelogram circumscribing a circle is rhombus. Ans   Given : ABCD is a parallelogram circumscribing a circle. To prove : - ABCD is a rhombus or AB

BIOMATH, Ask quHarvesting prevents the population size of a species from at...

Ask quHarvesting prevents the population size of a species from attaining its natural carrying capacity. We can add harvesting to the logistic model by assuming that the per capita

Pendulum, how many pendulum swings will it take to walk across the classroo...

how many pendulum swings will it take to walk across the classroom

How to adding rational expressions with common denominators, Adding Rationa...

Adding Rational Expressions with Common Denominators To add or subtract fractions or rational expressions with common denominators, all you do is add or subtract the numerators

Permuation and combination, how many words can be formed from letters of wo...

how many words can be formed from letters of word daughter such that each word contain 2vowles and 3consonant

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd