mba 522 6-7 D in 5th edition

mba 522 6-7 D in 5th edition - 0.52 0.48 3400 1768 12700...

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Problem 6-7 D in 5th edition of Anderson/Sweeney/Williams book. Students often ask how do the authors know $13000 is the optimum bid? You could do an analysis such as what follows. Dr. J. lower limit upper limit Bid P(win bid) P(lose bid) Profit Expected Profit 10000 15000 10100 0.02 0.98 5900 118 10200 0.04 0.96 5800 232 10300 0.06 0.94 5700 342 10400 0.08 0.92 5600 448 10500 0.1 0.9 5500 550 10600 0.12 0.88 5400 648 10700 0.14 0.86 5300 742 10800 0.16 0.84 5200 832 10900 0.18 0.82 5100 918 11000 0.2 0.8 5000 1000 11100 0.22 0.78 4900 1078 11200 0.24 0.76 4800 1152 11300 0.26 0.74 4700 1222 11400 0.28 0.72 4600 1288 11500 0.3 0.7 4500 1350 11600 0.32 0.68 4400 1408 11700 0.34 0.66 4300 1462 11800 0.36 0.64 4200 1512 11900 0.38 0.62 4100 1558 12000 0.4 0.6 4000 1600 12100 0.42 0.58 3900 1638 12200 0.44 0.56 3800 1672 12300 0.46 0.54 3700 1702 12400 0.48 0.52 3600 1728 12500 0.5 0.5 3500 1750 12600
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Unformatted text preview: 0.52 0.48 3400 1768 12700 0.54 0.46 3300 1782 12800 0.56 0.44 3200 1792 12900 0.58 0.42 3100 1798 13000 0.6 0.4 3000 1800 13100 0.62 0.38 2900 1798 13200 0.64 0.36 2800 1792 13300 0.66 0.34 2700 1782 13400 0.68 0.32 2600 1768 13500 0.7 0.3 2500 1750 13600 0.72 0.28 2400 1728 13700 0.74 0.26 2300 1702 13800 0.76 0.24 2200 1672 13900 0.78 0.22 2100 1638 14000 0.8 0.2 2000 1600 14100 0.82 0.18 1900 1558 14200 0.84 0.16 1800 1512 14300 0.86 0.14 1700 1462 14400 0.88 0.12 1600 1408 14500 0.9 0.1 1500 1350 14600 0.92 0.08 1400 1288 14700 0.94 0.06 1300 1222 14800 0.96 0.04 1200 1152 14900 0.98 0.02 1100 1078 15000 1 1000 1000...
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