ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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By using the expected utility theory approach with u(x)=x2, choose the optimal decision for three different possible outcomes with probabilities
p(ω1)=1/2, p(ω2)=p(ω3)=1/4,
rewards R(d1,ω1)=£49,R(d1,ω2)=R(d1,ω3)=£25,
R(d2,ω1)=£36,R(d2,ω2)=£100,R(d2,ω3)=£0,
R(d3,ω1)=£81,R(d3,ω2)=R(d3,ω3)=£0
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