Mr. Henok claims he has been unfairly dismissed by his employers. He consults a law firm owned by Mrs. Justice, who agrees to take up Henok’s case. The law consulting firm, owned by Ms Justice advises him that if Henok wins his case he can expect a compensation of 30,000 birr but if he loses he will receive nothing. The law consultant firm estimates her fee to be 5,000 birr. As an alternative the consultant offer him a ‘no win, no fee’ deal under which he pays no fee but if he wins his case, the consulting firm will take half of the compensation he receives. Henok also asked to pay his employer’s cost which is 1000 birr in both deals. He can decide against bringing the case, which will incur no cost and result in no compensation. Based on the information given above: a. Develop a payoff table to Henok’s case b. Advise Henok what to do: i. Using the maximax decision ruleii. Using the maximin decision rule.iii. Using the Minmax regret decision rule
Mr. Henok claims he has been unfairly dismissed by his employers. He consults a law
firm owned by Mrs. Justice, who agrees to take up Henok’s case. The law consulting
firm, owned by Ms Justice advises him that if Henok wins his case he can expect a
compensation of 30,000 birr but if he loses he will receive nothing. The law consultant
firm estimates her fee to be 5,000 birr. As an alternative the consultant offer him a ‘no
win, no fee’ deal under which he pays no fee but if he wins his case, the consulting firm
will take half of the compensation he receives. Henok also asked to pay his employer’s
cost which is 1000 birr in both deals. He can decide against bringing the case, which will
incur no cost and result in no compensation. Based on the information given above:
a. Develop a payoff table to Henok’s case
b. Advise Henok what to do:
i. Using the maximax decision rule
ii. Using the maximin decision rule.
iii. Using the Minmax regret decision rule
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