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Refer to the Following Payoff Table

Question 56

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Refer to the following payoff table:
Refer to the following payoff table:   There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time. Given that the research is done, what is the expected payoff using Bayes' decision rule? A)  −82 B)  −44 C)  0 D)  29 E)  40
There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time.
Given that the research is done, what is the expected payoff using Bayes' decision rule?


A) −82
B) −44
C) 0
D) 29
E) 40

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