MIT15_053S13_rec10sol

How does toms answer change solution the decision

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Unformatted text preview: g whether to play the game. How does Toms answer change? Solution. The decision tree is: E [D] = 1/4 × 2 − 3/4 × 1 = −0.25, Decision at B : max(−0.25, 0) = 0, so if Shell 3 doesnt have ball, Not Play. E [E ] = 1 × 2 − 0 × 1 = 2 Decision at C : max(2, 0) = 2, so if Shell 3 has ball, Play. Expected gain: 0.8 × 0 + 0.2 × 2 = $0.4. Therefore, value of information is $0.4. Problem 3 3 Gerber Product, Inc. (True story from 1998-99. <http://gbr.pepperdine.edu/993/tree.html>) Gerber Products, Inc. needs help in deciding whether to continue using the pl...
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This note was uploaded on 03/18/2014 for the course MGMT 15.053 taught by Professor Jamesorli during the Spring '07 term at MIT.

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