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If the decision maker knows nothing about the probabilities

Question: The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature:

State of Nature

Decision Alternatives s₁ s₂ s₃

d₁ 250 100 25

d₂ 100 100 75

a. Construct a decision tree for this problem.

b. If the decision maker knows nothing about the probabilities of the three states of nature, what is the recommended decision using the optimistic, conservative, and minimax regret approaches?

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Finance Basics: If the decision maker knows nothing about the probabilities

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