0.
75
$10
Electricity 0.25
-$3
Electric / Gas $7
Processor
0.6 $15
Gas
-$7
0.4
$6
Expected Value of Electric Expected Value of Gas
EV = (0.25 x -3) + (0.75 x 10) EV = (0.4 x -7) + (0.60 x 15)
$6.75 $6.20
= (0.4 x -7) + (0.60 x 15)
0.25 Design Success
$6
Electricity 0.75 Design Fail
-$7
Modifying Electric / -$3.75
Gas Processor
Design Success
0.75 $10
0.25 Design Fail
Gas
-$12
$4.50
Expected Value of Electric Expected Value of Gas
EV = (0.25 x 6) + (0.75 x -7) EV = (0.75 x 10) + (0.25 x -12)
-$3.75 $4.50
= (0.75 x 10) + (0.25 x -12)
0.25 Design Success + failure from previous step
$6 -3
Electricity 0.75 Design Fail + failure from previous step
-$7 -3
Modifying Electric / -$6.75
Gas Processor
Design Success + failure from previous step
0.75 $10 -7
0.25 Design Fail + failure from previous step
Gas
-$12 -7
-$2.50
Expected Value of Electric Expected Value of Gas
EV = (0.25 x 3) + (0.75 x -10) EV = (0.75 x 3) + (0.25 x -19)
-$6.75 -$2.50
Choose Gas
+ failure from previous step
$3
+ failure from previous step
-$10
+ failure from previous step
$3
+ failure from previous step
-$19
= (0.75 x 3) + (0.25 x -19)