1. Suppose a company can select among two decisions (d1 and d2) and face three states of nature (s1, s2 and s3) withthe following payoff table:Decision s1 s2 s3d1d2150 200 20050200500The probabilities of s1, s2, and s3 are unknown. Using the optimistic approach, what is the optimal decision and what isthe value of the payoff? Place the optimal decision in the first answer box and the maximum payoff used to arrive at thisdecision in the second.Question 6 options:2. Suppose a company can select among two decisions (d1 and d2) and face threestates of nature (s1, s2 and s3) with the following payoff table:Decision s1 s2 s3d1d2150 200 20050 200 500The probabilities of s1, s2, and s3 are unknown. Using the conservative approach, what is the optimal decision and what isthe value of the payoff? Place the optimal decision in the first answer box and the maximum payoff used to derive thissolution in the second.Question 7 options:83. Suppose a company must consider two decisions (d1 and d2) under two states of nature (s1 and s2). Suppose theexpected value functions for d1 and d2 are given as:EV(d1) p(8) + (1-p)(6)EV(d2) p(15) + (1-p)(3)where p = P(s1) and 1-p = P(s2). In conducting sensitivity analysis, which of the following is correct?Question 8 options:d2 is the optimal decision as long as p > 0.30d2 is the optimal decision as long as p > 0.05d1 is the optimal decision as long as p > 0.30d2 is never the optimal decision

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1. Suppose a company can select among two decisions (d1 and d2) and face three states of nature (s1, s2 and s3) with the following payoff table: ecision s1 s2 s3 150 50 d1 200 200 d2 200 500 he probabilities of s1, s2, and s3 are unknown. Using the optimistic approach, what is the optimal decision and what is he value of the payoff? Place the optimal decision in the first answer box and the maximum payoff used to arrive at this ecision in the second. Question 6 options:

1. Suppose a company can select among two decisions (d1 and d2) and face three states of nature (s1, s2 and s3) with the following payoff table: ecision s1 s2 s3 150 50 d1 200 200 d2 200 500 he probabilities of s1, s2, and s3 are unknown. Using the optimistic approach, what is the optimal decision and what is he value of the payoff? Place the optimal decision in the first answer box and the maximum payoff used to arrive at this ecision in the second. Question 6 options:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Eunice, the industry analyst of H&M, wants to determine the propensity of Major Clothingcompanies toward risk. She was able to determine the utility distribution of H&M, Uniqloand Dickies. For H&M, If the expected payoff of a venture is a loss of 125,000, the utilityvalue is 0.00, if a loss of 75,000, the utility value is .2, if breakeven, the utility value is .5,if gain of 75,000 .8 and if gain of 125,000 utility value is 1. For Uniqlo, if loss of 125,000utility value is 0, if loss of 75,000 utility value is .1, breakeven is .4, if a gain of 75,000,utility value is .7 and if gain of 125,000 utility value is 1. For Dickies, if loss of 125,000,utility value is 0, if loss of 75,000, utility value is .3 breakeven is .6, if gain of 75,000, utilityvalue is .9 and gain of 125,000, utility value is 1. What is the propensity to risk of the threeinternet companies? Explain your graph.
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3. Consider the game below. С1 C2 C3 R1 1, 1 4, 6 8, 5 1, 2 5, 4 R2 R3 2, 6 2, 7 7, 6 0, 7 3.1. Does the game have any pure strategy NEs? 3.2. Check whether a mixed strategy NE exists in which A is mixing R1 and R2 with positive probabilities, playing R3 with zero probability, while B is mixing C1 and C3 with positive probabilities while playing C2 with zero probability. [Let (p1,P2, P3) be the probabilities with which A plays (R1, R2,R3) and let (q1,92, 93) be the probabilities with which B plays (C1, C2,C3). Make use of the following NE test: m* is a NE if for every player i, u;(mị , m²¿) = u;(Si, m²¡) for every si E S¡|m¡(sji) > 0 and u¡(m¡ ,m²¡) > u¡(s¡,m;) for every si E S¡ |m¡ (s¡) = 0. Hint: Each player must be indifferent between those of her pure strategies that are used (with positive probability) in her mixed strategy, and unused strategies must not yield a payoff that is higher than the payoff a player gets with her NE (mixed) strategy.] %3D
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solve d please
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please only do: if you can teach explain steps of how to solve each part what is the optimizatio formula that was use for foc? please solve each part
. If you examine the decision tree in Figure 9.12 (orany other decision trees from PrecisionTree), you willsee two numbers (in blue font) to the right of each endnode. The bottom number is the combined monetaryvalue from following the corresponding path throughthe tree. The top number is the probability that thispath will be followed, given that the best strategy isused. With this in mind, explain (1) how the positiveprobabilities following the end nodes are calculated,(2) why some of the probabilities following the endnodes are 0, and (3) why the sum of the probabilitiesfollowing the end nodes is necessarily 1.
sub= 24 help
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(ii) A mixed strategy profile (p, q) is one in which p = (p,P2.... P) is the mixed strategy of player 1, and q- (g1, q2,..q4) is the mixed strategy of player 2. Show that if p, >0 in a Nash equilibrium profile (p*, q*), the player 2 must also play i with strictly positive probability q'; > 0. (State clearly any theorem you use to show this. You are not required to justify the theorem.) %3D