Profit Payoff Table shows the profits (in thousands of dollars) under each of the 3 possible economic conditions: 1, 2, and 3.
States of Nature Decision Alternative
51 52 53
d1 38 28 28
d2 80 60 -10
d3 15 40 16
Assume the states of nature have the following probabilities: P(s) = 0.2, P(s) = 0.3, P(s) = 0.5.
Which decision alternative is best?
a) d1
b) d3
c) d2
d) They are all equal.