Business, 16.04.2021 17:50 xxaurorabluexx

Instead of the seismic sounding, Joe could pay a geologic consultant for a field inspection that will yield information about the subsurface structure. The consultant gives Joe the following information about the accuracy of his inspection: if the subsurface structure is truly type A, then there is a 85% probability that the inspection will indicate that subsurface structure is type A; if the subsurface structure is truly type B, then there is a 50% probability that the inspection will indicate that subsurface structure is type B. Joe is risk neutral in this situation. Joe can get the results of the inspection in time to review them before making the drilling decision. What is the expected value of the imperfect information generated by the field inspection?

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Instead of the seismic sounding, Joe could pay a geologic consultant for a field inspection that wil...