QUESTION 2 [25 Marks]
A decision maker faced with four decision alternatives and fourstates of nature develops the followingprofit payoff table.
States of nature
|
Decision alternative |
S_1 |
S_2 |
S_3 |
S_4 |
|
d_1 |
14 |
9 |
10 |
5 |
|
d_2 |
11 |
10 |
8 |
7 |
|
d_3 |
9 |
10 |
10 |
11 |
|
d_4 |
8 |
10 |
11 |
13 |
(a) Define and use the average payoff strategy to choose thebest decision. (4 marks)
(b) Define and use the aggressive strategy to choose the bestdecision. (4 marks)
(c) Define and use the conservative
OR
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