Question12: In the given payments matrix, the earnings that a business can obtain with different distribution strategies (S1, S2, S3) are given. The probabilities of the natural states are respectively; P(Q1)=0.2, P(Q2)=0.4, P(Q3)=0.4. 1-) What is the expected payment when the information is not received? 2-) What is the expected payment when the information is received? 3-) What is the expected value of additional information?

Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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Question12: In the given payments matrix, the earnings that a business can obtain with different distribution strategies (S1, S2, S3) are given.

The probabilities of the natural states are respectively; P(Q1)=0.2, P(Q2)=0.4, P(Q3)=0.4.

1-) What is the expected payment when the information is not received?

2-) What is the expected payment when the information is received?

3-) What is the expected value of additional information?

S1
S2
S3
Q1
1068
809
596
Q2
534
786
918
779
489
732
Transcribed Image Text:S1 S2 S3 Q1 1068 809 596 Q2 534 786 918 779 489 732
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