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fi(s) 0.8 0.6 0.4 0.2 0 0.2 0.4 0.6 0.8 1 S

fi(s) 0.8 0.6 0.4 0.2 0 0.2 0.4 0.6 0.8 1 S

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The doctor must decide which medication to prescribe to the patient. Possible states are s∈[0,1]. She has three medications available: A, B, and C. The effect of medication A is described by the blue function, the effect of medication B by the red function, and the effect of medication C by the black function. For which medication will the doctor decide if she decides based on the maximax criterion and Wald's maximin criterion?

The blue function is defined as fA​(s)=1/5​(cos(4s)+2), the red function is fB​(s)=2/5​(sin(4s)+1), and the black function is fC​(s)=1/2​. For which medication will the doctor decide if she decides based on Laplace's criterion?

 

fi(s) 0.8 0.6 0.4 0.2 0 0.2 0.4 0.6 0.8 1 S
Transcribed Image Text:fi(s) 0.8 0.6 0.4 0.2 0 0.2 0.4 0.6 0.8 1 S
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