In Problem S1-22 the director of career advising at Grand Valley Community College has paid a local economic forecasting firm to indicate a probability for each future economic condition over the next five years. The firm estimates that there is a .15 probability of a recession, a .50 probability that the economy will be average, a .25 probability that the economy will be good, and a .10 probability that it will be robust. Using expected value determine the best degree program in terms of projected income. If you were the director of career advising which degree program would you recommend?
The director of career advising at Grand Valley Community College wants to use decision analysis to provide information to help students decide which two-year degree program they should pursue. The director has set up the following payoff table for six of the most popular and successful degree programs at GVCC that shows the estimated five-year gross income ($) from each degree for four future economic conditions:
Determine the best degree program in terms of projected income, using the following decision criteria:
c. Equal likelihood
d. Hurwicz ()