Essay
Metropolitan Cablevision has the choice of using one of three DVR systems.Profits are believed to be a function of customer acceptance.The payoff to Metropolitan for the three systems is as follows:
The probabilities of customer acceptance for each system are as follows:
The first vice president believes that the indifference probabilities for Metropolitan should be as follows:
The second vice president believes Metropolitan should assign the following utility values:
a.Which vice president is a risk taker? Which one is risk averse?
b.Which system will each vice president recommend?
c.Which system would a risk-neutral vice president recommend?
Correct Answer:

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