Three decision makers have assessed utilities for the problem whose payoff table appears below. probabilities and payoffs. S1 S2 S3 D1 500 100 -400 D2 200 150 100 D3 -100 200 300 Probability .2 .6 .2 Indifference Probability for Person
8) Three decision makers have assessed utilities for the problem whose payoff table appears
below.
probabilities and payoffs.
|
|
S1 |
S2 |
S3 |
|
D1 |
500 |
100 |
-400 |
|
D2 |
200 |
150 |
100 |
|
D3 |
-100 |
200 |
300 |
|
Probability |
.2 |
.6 |
.2 |
Indifference Probability for Person
Payoff A B C
300 .95 .68 .45
200 .94 .64 .32
150 .91 .62 .28
100 .89 .60 .22
-100 .75 .45 .10
a. Plot the utility function for each decision maker.
b. Characterize each decision maker's attitude toward risk.
c. Which decision will each person prefer?
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