ce167f11_HW4_P4_Solution - P = 0.6 Payoff = $16 Lose P =...

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Bid? Bid $16 Million Win P = 1.0 Bid $7 million Consultant Win $7 million P = 0.6 Lose 0$ P = 0.4 High $120 mill - $5 mill P = 0.15 Medium $28 mill - $5 mill P = 0.35 Low $0 mill - $5 mill P = 0.50 Says High P = 0.15 Says Medium P = 0.35 Says Low P = 0.50 Bid $16 million Win = 1.0 Payoff = $99 Bid $7 million Win P = 0.6 Payoff = $108 Lose P = 0.4 Payoff - $0 Bid $16 million Win = 1.0 Payoff = $7 High $120 mill - $5 mill P = 0.15 Medium $28 mill - $5 mill P = 0.35 Low $0 mill - $5 mill P = 0.50 Bid $7 million Win
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Unformatted text preview: P = 0.6 Payoff = $16 Lose P = 0.4 Payoff - $0 Bid $16 million Win = 1.0 Payoff = -$21 Bid $7 million Win P = 0.6 Payoff = -$12 Lose P = 0.4 Payoff - $0 EMV = ($115*0.15)+($23*.35)+(-$5*.5)-$16 = $6.80 million EMV = ($115*0.15)+($23*.35)+(-$5*.5)-$7 = $15.80 million EMV = $15.8*0.6 = $9.48 EMV = $108*0.6 = $64.8 EMV = $16*0.6 = $9.6 EMV = -$12*0.6 = -$7.2 EMV = (0.15*$99) + (0.35*$9.6) + (0.5*-$7.2) = $11.51...
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This note was uploaded on 01/06/2012 for the course CIVIL AND 167 taught by Professor Ibbs during the Fall '11 term at University of California, Berkeley.

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