Decision Analysis

Running head: DECISION ANALYSIS
Decision Analysis
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DECISION ANALYSIS
1
Table of Contents
Answer 1.A................................................................................................................................3
Advantage of using payoff matrix..............................................................................................3
Answer 1.B.................................................................................................................................3
Advantage of using decision trees..............................................................................................3
Answer 1.C.1..............................................................................................................................3
Answer 1.C.2..............................................................................................................................3
Answer 1.C.3..............................................................................................................................4
Answer 1.C.4..............................................................................................................................4
Answer 1.C.5..............................................................................................................................4
Answer 1.C.6..............................................................................................................................4
Answer 1.C.7..............................................................................................................................4
Answer 2.a..................................................................................................................................5
Answer 2.b.................................................................................................................................5
Answer 2.c..................................................................................................................................5
Answer 2.d.................................................................................................................................5
Answer 3.1.................................................................................................................................5
Answer 3.2.................................................................................................................................7
Answer 3.3.................................................................................................................................7
Answer 4.1.................................................................................................................................7
Answer 4.2...............................................................................................................................10
Answer 4.3...............................................................................................................................10

DECISION ANALYSIS
2
Answer 5.1.1............................................................................................................................11
Answer 5.1.2............................................................................................................................11
Answer 5.2...............................................................................................................................11
Answer 5.3...............................................................................................................................11
Answer 5.4...............................................................................................................................11
Reference..................................................................................................................................13

DECISION ANALYSIS
3
Answer 1.A
Advantage of using payoff matrix
The simultaneous move conditions with information asymmetry or symmetric, the
matrix presents the payoffs for the more than one strategies in more than one conditions.
Answer 1.B
Advantage of using decision trees
The asymmetric and sequential move decisions are easy to interpret and calculate by
this method. This is also easy presentable and understandable.
Answer 1.C.1
Favourable Unfavourable
ROB1 50000 -40000
ROB2 30000 -20000
NOROB 0 0
The above payoff matrix presents the payoffs for the 3 strategies in two market
conditions. The payoffs for the ROB1 and ROB2 and for not choosing any robot in the
favourable and unfavourable market condition. In favourable market condition the pay offs of
the robots are $50000, $30000 and $0 for ROB1, ROB2 and NOROB respectively. In the
unfavourable market condition, the payoffs are loss of $40000, loss of $20000 and no loss for
ROB1, ROB2 and NOROB respectively (Guo & Liu, 2019).
Answer 1.C.2
If George is an optimist then he will choose the ROB1 as the maximax solution of the
above pay of matrix is ROB1 in the favourable market.