Suppose we are interested in investing in one of three investment opportunities: d1, d2, or d3.
The following profit payoff table shows the profits (in thousands of dollars) under each of the 3 possible economic conditions: s1, s2, and s3.
Determine the best decision based on the optimistic decision making approach.
|
Decision
|
s1
|
s2
|
s3
|
|
d1
|
-5
|
28
|
30
|
|
d2
|
19
|
17
|
15
|
|
d3
|
3
|
40
|
6
|
-
d3
-
d1
-
d2
-
d2 or d3
-
d2 or d1