Question

Name: 25 Game Theory ECN 416 FOSTER Score: Assignm ent #1: Introduction to Choice Theory Use a pencil. Put your answer in the appropriate place and box it. Show any work necessary to ensure partial credit. Staple these pages. 1) Draw the following probability distribution, (z), in tree form and state its expected value (3 pts) p(0)=0.15 (40)0.45 P(75)0.40 : EV(z) = 2) Draw the following probability distribution, (z'), in tree form and state its expected value (3 pts) z' p(20)0.50 p(40)0.20 P(75)0.30 3) Draw the final generalized mixed probability distribution tree for the (a, 1 - a) mix of z and z' where 0 a1 (4 pts) Hint: Your drawing should have 4 branches and probabilities must be in terms of the variable, a

Answer 1

Answer:

Question 1)

0.15 0.45 40 75

Expected Value=0.15*0+0.45*40+0.40*75=48