Information Flow

F3260 he missing ten expected payoff values underlined

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 80 960 1620 (g). Based on the probabilities given above, what is the expected 3288=$312EMV = 3288 400 500 0 260 920 500 1100 200 0 660 600 1300 400 200 0 (f).What is the maximum average amount Pickens pays for the seismic test, i.e., the expected value of the seismic test? EVSI (seismic test)= (0.601+0.050)- 0.52=$0.131 (millions) (g). Without doing any test, if someone has a crystal ball that predicts 100% sure the drill will have an average finding, what is the value of this information (VPI)? V=.10(4.24)+.40(1.04)+.5(.64)=0.52M. VPI=1.04-0.52=0.52M EMV = 3of p erfect information (EVPI) if there is perfect value 288 information? EVwPI=.1(3500)+.3(3200)+.4(3600)+.2(4200)=3590. EMV(600)= 3260 EVPI=EVwPI- EMV=3590- 3288=$302EMV(600)= 3260 4.(a). Based on above posterior analysis for geologic test, what is probability of...
View Full Document

This test prep was uploaded on 04/02/2014 for the course MGT 2251 taught by Professor Chang during the Fall '08 term at Georgia Tech.

Ask a homework question - tutors are online