1. Problem A.27 $3000 to gather information Under a favorable market
$15,000 for large $5,000 for small
Unfavorable
Lose $20,000 for large, -$10,000 for small
Good prediction: 50%
Favorable market: 70% with no info
Favorable market: 90% with good report
Favorable market: 40% with bad report

2. Gather 1
Don’t Gather

3. Gather 1
Don’t Gather 3
Sm.
Lg.

4. Gather 1
Don’t Gather 3
Sm. + 6
Lg. - + 7 -

5. R+
Gather 2 R- 1
Don’t Gather 3
Sm. + 6
Lg. - + 7 -

6. 4 2 5 1 3 6 7 Sm. Lg. R+ Sm. Gather R- Lg. Don’t Gather Sm. + Lg. - +

7. 8 9 4 10 2 5 1 11 3 6 7 + - Sm. + - Lg. R+ + Sm. - Gather R- + Lg. -
Don’t Gather - 3
Sm. + 6
Lg. - + 7 -

8. 8 9 4 10 2 5 1 11 3 6 7 + - Sm. + - Lg. R+ + Sm. - Gather R- + Lg. -
Don’t Gather - 3
Sm. + 5 6
Lg. -
-10 + 7 15 -
-20

9. + 2 8
-13 -
Sm. + 12 9 4 -
-23
Lg. R+ 2 +
Sm. 10 -
-13
Gather 2 5 R- 1
Lg. + 12 11 -
-23
Don’t Gather 3
Sm. + 5 6
Lg. -
-10 + 7 15 -
-20

10. 0.9 + 2 8
0.1
-13 -
Sm. + 12
0.9 9 4
0.1 -
-23
Lg. R+ 2
0.4 +
0.5
Sm. 10
0.6 -
-13
0.5
Gather 2 5 R- 1
Lg. + 12
0.4 11
0.6 -
-23
Don’t Gather 3
Sm.
0.7 + 5 6
Lg.
0.3 -
-10 + 7
0.7 15
0.3 -
-20

11. 0.5
0.9 + 2 8
0.1
-13 -
Sm. + 12
0.9 9 4
0.1 -
-23
Lg. R+ 2
0.5
0.4 +
Sm. 10
0.6 -
-13
0.5
Gather 2 5 R- 12 1
Lg. +
0.4 11
-23
Don’t Gather
0.6 - 3
Sm.
0.7 + 5 6
Lg.
0.3 -
-10 + 7
0.7 15
0.3 -
-20

12. 0.5
0.9 + 2 8
0.1
-13 -
Sm. + 12
8.5
0.9 9 4
0.1 -
-23
Lg. R+ 2 -7 +
0.5
0.4
Sm. 10
0.6 -
-13
0.5
Gather 2 5 R- -9 1
Lg. + 12
0.4 11
-23
Don’t Gather
0.6 - 3
Sm.
0.7 + 5 6
Lg.
0.3 -
-10
0.7 + 7 15
0.3 -
-20

13. 0.5
0.9 + 2 8
0.1
-13 -
Sm.
8.5 + 12
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7
0.5
0.4 +
Sm. 10
0.6
0.5 -
-13
Gather 2 5 R- -9 12 1
Lg. +
0.4 11
Don’t Gather
0.6 -
-23 3
Sm.
0.7 + 5 6
Lg.
0.3 -
-10 + 7
0.7 15
0.3 -
-20

14. 0.5
0.9 + 2 8
0.1
-13 -
Sm. + 12
8.5
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7
0.4 +
0.5
Sm. 10
0.6 -
-13
0.5
Gather 2 5 R- -9 + 12 1
Lg.
0.4 11
-23
Don’t Gather
0.6 - 3
Sm. -3
0.7 + 5
Do nothing 6
Lg.
0.3 -
-10 + 7
0.7 15
0.3 -
-20

15. 0.5
0.9 + 2 8
0.1
-13 -
Sm.
8.5 + 12
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7 +
0.5
0.4
Sm. 10 -3
0.6
0.5 -
-13
Gather 2 5 R- 1
Lg. -9 + 12
0.4 11
0.6 -
-23
Don’t Gather 3
Sm. -3
0.7 + 5
Do nothing 6
Lg.
0.3 -
-10 + 7
0.7 15
0.3 -
-20

16. 0.5
0.9 + 2 8
0.1
-13 -
Sm.
8.5 + 12
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7
0.4 +
0.5
2.75
Sm. 10 -3
0.6 -
-13
0.5
Gather 2 5 R-
Lg. -9 + 12 1
0.4 11
0.6 -
-23
Don’t Gather 3
Sm. -3
0.7 + 5
Do nothing 6
Lg.
0.3 -
-10 7
0.7 + 15
0.3 -
-20

17. 0.5
0.9 + 2 8
0.1
-13 -
Sm. + 12
8.5
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7
0.5
0.4 +
2.75
Sm. 10 -3
0.6 -
-13
0.5
Gather 2 5 R- -9 1
Lg. + 12
0.4 11
Don’t Gather
0.6 -
-23 3
Sm.
0.5 -3
0.7 + 5
Do nothing 6
Lg.
0.3 -
-10
4.5
0.7 + 7 15
0.3 -
-20

18. 0.5
0.9 + 2 8
0.1
-13 -
Sm. 12
8.5 +
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7
0.5
0.4 +
2.75
Sm. 10 -3
0.6
0.5 -
-13
Gather 2 5 R- 12 1
Lg. -9 +
0.4 11
4.5
Don’t Gather
0.6 -
-23 3
Sm.
0.5 -3
0.7 + 5
Do nothing 6
Lg.
0.3 -
-10
4.5 7
0.7 + 15
0.3 -
-20

19. 8 9 4 10 2 5 1 11 3 6 7 0.5 0.9 + 2 Answer: Don’t Gather & Build Large
0.1
-13 -
Sm. + 12
8.5
0.9
8.5 9 4
0.1 -
-23
Lg. R+ 2 -7
0.5
0.4 +
2.75
Sm. 10 -3
0.6
-13
0.5 -
Gather 2 5
4.5 R- -9 12 1
Lg. +
0.4 11
4.5
-23
Don’t Gather
0.6 - 3
Sm.
0.5 -3
0.7 + 5
Do nothing 6
Lg.
0.3 -
-10
4.5 + 7
0.7 15
0.3 -
-20