The following payoff table is given
Find out which option is proposed by the criterion of maximum
expected payoff if the probability table of the Bi situations
is
Homework Answers
| =3/15 | =2/15 | =4/15 | =4/15 | =2/15 | ||
| B1 | B2 | B3 | B4 | B5 | Expected payoff | |
| A1 | =B25*B31 | =C25*C31 | =D25*D31 | =E25*E31 | =F25*F31 | =SUM(B33:F33) |
| A2 | =B26*B31 | =C26*C31 | =D26*D31 | =E26*E31 | =F26*F31 | =SUM(B34:F34) |
| A3 | =B27*B31 | =C27*C31 | =D27*D31 | =E27*E31 | =F27*F31 | =SUM(B35:F35) |
| A4 | =B28*B31 | =C28*C31 | =D28*D31 | =E28*E31 | =F28*F31 | =SUM(B36:F36) |
| 0.2 | 0.133333 | 0.26666667 | 0.266667 | 0.133333 | ||
| B1 | B2 | B3 | B4 | B5 | Expected payoff | |
| A1 | 0.6 | -0.4 | 2.93333333 | 2.133333 | 1.2 | 6.466667 |
| A2 | 1.8 | 0.8 | 1.6 | 1.866667 | 1.6 | 7.666667 |
| A3 | 1.6 | 2.666667 | 3.2 | 3.2 | 1.333333 | 12 |
| A4 | 1.8 | 0.266667 | -0.8 | 1.333333 | 0.4 | 3 |
By the criterion of the maximum payoff value, the option A2 has to be selected and it has the highest payoff value of 7.6667
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I got the entries for the payoff table but now face another problem: how do I...
I got the entries for the payoff table but now face another
problem: how do I work with negatives?
For maximax you pick the largest of each row, so -300, -1575, and
-2650. The answer would be -300.
For maximin you'd pick the largest minimum. Wouldn't this also work
out to -300 (since you're trying to find the minimum at or above
zero?
Appreciate your help. :)
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I got the entries for the payoff table but now face another
problem: how do I work with negatives?
For maximax you pick the largest of each row, so -300, -1575, and
-2650. The answer would be -300.
For maximin you'd pick the largest minimum. Wouldn't this also work
out to -300 (since you're trying to find the minimum at or above
zero?
Appreciate your help. :)
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