Question: The Go4Broke Company owns land that may have oil. Another company has offered to buy the land for $90,000, but Go4Broke is considering holding on to the land and doing its own drilling. If oil is found, the company’s expected profit will be $700,000; however, if the property happens to be dry, there will be a loss of $100,000 due to the drilling expenses.
Should Go4Broke or keep it and drill, if it makes its decision using the following criteria:
c) Minimax (Regret)
d) Equal Probabilities (Laplace)
Deliverables: Word Document