MIT15_053S13_rec10sol

In order to win the stued monkey tom needs to play a

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Unformatted text preview: rder to win the stuffed monkey Tom needs to play a game that costs $1. In the game there are 5 shells and a ball that is hidden behind one of the shells. In order to win the monkey, Tom needs to pick the shell that the ball is under. The monkey overall is worth $3. Assume in all parts of this problem the probability the ball is behind a give shell is .2 (i.e. 1/# of shells) Part 2.A Determine using a decision tree if it is in Toms best interest to play the game. Solution. The decision tree is: E [B ] = 0.2 × 2 − 0.8 × 1 = −0.4 < 0, so dont play...
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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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