{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lecture 4

# Lecture 4 - Lecture 4 Monday 9:29 AM 1 Decision theory...

This preview shows pages 1–3. Sign up to view the full content.

Lecture 4 Monday, February 04, 2008 9:29 AM 1. Decision theory: decision making without taking into account strategy. Answer to all maybe. a. Higher probability of success b. Higher yield c. Negative yield. 2. To make a decision: rational decision maker chose the one with the higher payoff. Simplistic  model without uncertainty. a. Study, sure to pass, if Benefit is 20, cost is 10, payoff is 10 b. Not study, sure to fail, benefit is 0, cost is zero, payoff is zero 3. With uncertainty, to make a decision, Rational Choice theory, chose the choice with higher  expected yield. a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p . Choices B Cost Payoff Study and Pass 20 10 10 Study and Fail 5

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
10 -5 Don't study and Fail 0 0 0 q. r. s. t. u. v. Probability Percentile S &Pass 40 S& Fail  60 w. Expected payoff for studying: A calculation of payoff weighed according to probability i.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 5

Lecture 4 - Lecture 4 Monday 9:29 AM 1 Decision theory...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online