FINAL EXAM ECON2S00Y a Use the decision prof table given here to complete parts
ID: 3322865 • Letter: F
Question
FINAL EXAM ECON2S00Y a Use the decision prof table given here to complete parts (e) through (d proft States of Nature Altemativ a) Use the maximax criterion b) Use the maximin criterion to determine which decision alitero c) Use the Hurwicz criterion to determine d) Use the Hurwicz criterion to determine greater than 0.8 e) Compute an criterion to select which decision alternative to select for a 0.8 greater thar Hunwiciteon to cetermine whicth decision alternatve which decision alternative to select for a lower and etermne cdecis onble trom those data. Use this table and a minimax regret decision alternative to select 20 pointsExplanation / Answer
From given payoff matrix.
a) Max value for each row is as
And from above table Max value is 30.
Therefore, Maximax choice is to Decision Alternative D3.
b)
Minimum value for each row is as
And from above table Max value is -5.
Therefore, Maximin choice is to Decision Alternative D1.
c)
Let,By using Hurwicz criterion we determine decision alternative to select for alpha = 0.8 as
Here , from above table Max value is 19 for 2 decision alternativies.
Therefore, Maximin choice is to Decision Alternative D1and also D3.
d) If alpha increases by 0.1 then value is as
Here , from above table Max value is 24.5.
Therefore, Maximin choice is to Decision Alternative D3.
And ,
If alpha decreases by 0.1 then value is as
Here , from above table Max value is 16.
Therefore, Maximin choice is to Decision Alternative D1.
e) We compute opportunity loss table using minimax regret as criterion as
Their is no given the probability for Status of nature , So we do not compute Expected opportunity loss. So do not determine the decision alternative to select.
Row Max D1 25 D2 20 D3 30Related Questions
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