508 Chapter 12 Decision Making under Uncertainty
$76
.2
$69
.5
$55
.3
$76
.2
$69
.5
$55
.3
$76
.2
$69
.5
$55
.3
D
E
F
700
2,460
350
150
1,180
620
300
1,340
700
8,000 barrels
16,000 barrels
5,000 barrels
.15
.55
.3
$76
.2
$69
.5
$55
.3
$76
.2
$69
.5
$55
.3
$76
.2
$69
.5
$55
.3
G
H
I
400
1,940
50
–150
820
260
–60
820
180
8,000 barrels
16,000 barrels
5,000 barrels
.28
.48
.24
Oil at 5,000 feet
Oil at 3,000 feet
.13
.21
–400
No oil
.66
Drill
A
B
C
1,372
636
360
815.4
852
276
60
353.8
–83.7
FIGURE 12.2
A More Complicated Drilling Decision
This decision tree contains multiple risks that generate 19 possible outcomes.
c12DecisionMakingunderUncertainty.qxd 9/29/11 1:34 PM Page 508