A famous news anchor is tired of political reporting and decides to think seriously about running for the U.S. Senate, estimating the probability of being elected as 60%. Campaign expenditures are not a problem, but the gain or loss of prestige could be. The anchor estimates that, if prestige can be quantified, a win would be worth 100 prestige points and a loss would be represented by -50 prestige points.
a) Draw the decision tree. What should be done?
b) How many prestige points should the anchor be willing to spend in order to know now how the election would turn out?