solution_to_week_2_homework

solution_to_week_2_homework - 3. a) Bellhop Management...

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3. a) Good Recession Bellhop 0 25,000 Management 35,000 0 Choose bellhop job. b) Bellhop: 120,000(.4) + 60,000(.6) = $84,000; management: 85,000(.4) + 85,000(.6) = $85,000; select management job. c) Bellhop: 120,000(.5) + 60,000(.5) = $90,000; management: 85,000(.5) + 85,000(.5) = 85,000; select bellhop job. 9. a) Select Army vs. Navy; maximax payoff = 12.5 b) Select Alabama vs. Auburn; maximin payoff = 5.4 c) Equal likelihood criterion: EV(A|A) = 10.2(.33) + 7.3(.33) + 5.4(.33) = 7.6 EV(G|GT) = 9.6(.33) + 8.1(.33) + 4.8(.33) = 7.4 EV(A|N) = 12.5( 33) + 6.5(.33) + 3.2(.33) = 7.3 Select Alabama vs. Auburn. 13. a) Maximax criteria: Office park 4.5 ( maximum) Office building 2.5 Warehouse 1.7 Shopping center 3.6 Condominiums 3.2 Select office park b) Maximin criteria: Office park 0.5 Office building 1.5 ( maximum) Warehouse 1.0 Shopping center 0.7 Condominiums 0.6 Select office building c) Equal likelihood Office park: 0.5(.33) + 1.7(.33) + 4.5(.33) = 2.21 ( maximum) Office building: 1.5(.33) + 1.9(.33) + 2.5(.33) = 1.95
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solution_to_week_2_homework - 3. a) Bellhop Management...

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