Logical Decisions - Classweb

commit to buying their truck before the engine specifications have
been finalized.
Please enter P so that A and B are equally preferred:
Alternative A
50 percent chance of
Power = 175 and Fuel Economy = 16
and 50 percent chance of
Power = 109 and Fuel Economy = 23
Alternative B
P = 50 percent chance of
Power = 175 and Fuel Economy = 23
and 100 - P percent chance of
Power = 109 and Fuel Economy = 16
Figure 5-5. Question for assessing the interaction between Power and
Fuel Economy using the probability method.
Let's look more closely at the two alternatives. Alternative A is
the "hedge your bet" option. You will get the most preferred level
on either Power or Fuel Economy, but not both. Alternative B is the
"all or nothing" alternative. You will get the most preferred level
on both measures with probability P or the least preferred level on
both measures with probability (1-P).
The discussion above about the interactions between Power and
Fuel Economy gives us a clue about how to answer the question.
Since we are looking for both Fuel Economy and Power and since
for alternative A, one of these measures is guaranteed to have its
least preferred level, neither of the possibilities in alternative A
may look very attractive.
On the other hand, although alternative B has a 50 percent chance
(as a default) of having the least preferred level on both measures,
it also has a 50 percent chance of getting the most preferred level
on both measures. Since the most preferred part of alternative B
is the only one of the four possibilities that looks attractive, you
will pick alternative B when P = 50 percent.
The question on the screen is asking you to choose a particular
probability for B that makes alternatives A and B equally
preferred. In the probability assessment method, Ps less than 50
Section 5 -- Advanced Tutorial 5-17