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Class: MBA 6053-19N-2A22-S2, Economics for Managers Book: Managerial Economics Luke M. Froeb I put added 4 samples so the expert would understand what was needed for the assignment. Due Sunday, November 7, 2021 at 5:00 p.m. This is the Assignment: Discussion Board Question: Identify a situation that involves making decisions using expected value, and detail the different options, expectations, and payouts. Discuss the risks involved with those expectations and, if applicable, the payouts. Include in your discussion an explanation of how to determine how much information to gather to minimize uncertainty. Finally, explain which decision should be made. Use this: Choosing a career that I love as a (Manager Administrator) over my passion dream job as a Social Worker (which I quit after 12 years) Burnout. Yet, I am still helping people just in a different capacity. Use the Discussion Board Question to answer all the questions regarding the 2 careers. See the examples below that my colleagues submitted to the Discussion Board. They are labeled 1, 2, 3 and 4. ***If the expert can think of another decision that’s easier he or she can use that, I just need the assignment completed by 5 p.m. today. 1. Getting my MBA was a big decision I needed to make, especially with the expected value I had with my first master’s degree versus what happened and what the payoffs ended up being. Options Expected value Payouts Risk A Stay in the public sector in the safety profession with current education Build upon experience in an industry I am familiar with Annual cost of living increase, no debt with additional student loans No growth opportunities, cost of living increase isn’t guaranteed B Move to private sector in the safety profession with current education New industry to learn (private vs public), additional experience, new responsibilities Much higher starting rate in public sector, annual bonuses, no increased debt Declining economy, last hired is first to leave, many companies in the public sector require certifications in safety, not a master’s degree. C Stay in current position while pursuing MBA Continue gaining experience in safety, while learn an entirely different background in business More opportunities with two master’s degree leading to higher pay, room for growth Starting in a new profession without experience, deciding what/if I want to specialize in a specific area, getting my foot in the door D Stay in current position with MS in Safety and Health and MBA Laterally move to a new position and incorporate both business and safety in a familiar place More responsibilities, increased pay Becoming complacent in the same industry, such a position doesn’t exist and would be at the pleasure of the current mayor Getting my MBA is incredibly risky, especially without knowing what I want to do and where, however I think enrolling in school was the right decision. Having two master’s degrees will (hopefully) make me more marketable but also provide room for growth opportunities. I’m in a holding pattern with my current job, but it provides stability to pursue other options. Making a lateral move would be nice, but it is/would be risky to be at the pleasure of the current mayor so my job wouldn't be stable. While trying to advance into a new market is extremely risky, only having a background, in my opinion, is even riskier. With the uncertainty of the job market, I will wait to choose a specialty until closer to graduating. At that point I can research the other courses offered at CSU and decide if I want to specialize in Marketing, Finance, or Economics 2. I am currently facing issues with my iPhone X (old phone, short battery life, glitching, etc.). I am not sure whether to be patient and wait for the iPhone 14 to be released next year or buy the iPhone 13. Since Black Friday is soon approaching, I’m hoping its price will decrease, even if its just a few dollars less. Here are my options presented in the table below: Options Expectations Payouts 1. Buy the iPhone 13 now Accept Regular Features Spend Money 2. Do not buy the iPhone 13 now Tolerate a slow phone Save Money 3. Buy the iPhone 14 later Enjoy Advanced Features Spend Money Later 4. Buy an Android whenever current phone completely dies Learn a different operating system Spend Less Money If I proceed with the 3rd option, the risk I am taking in waiting for the iPhone 14 is the additional features that may or may not be implemented. If the iPhone 14 is no different than the 13, I would have one, waisted an entire year dealing with a slow phone that glitches, and two, waisted the opportunity to buy the iPhone 13 at a cheaper price (i.e., option 1). To avoid uncertainty in this situation, I will do a bit of research on the upcoming iPhone 14 to try and foreshadow the new and different features. In addition, I will book an appointment with Apple Care to figure out how much time I really have left with my current iPhone to see whether buying a new one can wait or not. Since I will be spending money either way, the best decision will be to go with the option I feel will give me more value, after measuring all risks, and that is option 3 (I hope). 3. At the end of the 2019 National Football League (NFL) season, Tom Brady had just finished his 20th season with the New England Patriots and was now 42 years old as a Free Agent. The Tampa Bay Buccaneers, a different NFL team, were a losing team from 2017-2019. They needed to make a decision about their offense in order to perform better. They could offer Tom Brady a contract, but there was uncertainty involved with this transaction. Though Tom Brady had been performing well the past few years with the Patriots, he was still 42 years old and not getting any younger. At an older age compared to most NFL players, he would be more prone to injuries and/or a declining performance. However, Tom has proven himself a winner and the potential payout could be a Superbowl team! In the decision planning stage, the Buccaneer’s front office may utilize the Expected Pay-out with Uncertainty equation to estimate the pay-out. They could start with a two year, $80-million contract which is more than any team will offer and guaranteed to bring Tom in, however; they have no more money to offer other players that could help Tom out and now there is a 50/50 chance he is a bust or he has a successful season. The next decision is to offer him a two year, $50-million contract and use the other $30 million to pay other good players to come to Tampa and help Tom. Here, there is a 25% chance Tom is a bust versus a 75% chance of a successful season. (.50) x 80 million + (.50) x 80 million = 80 million 1. Tom Brady is a bust - Tampa loses $80 million (50% probability) 2. Tom Brady is successful - $80 million invested in Tom leads to a successful season, higher profits from higher game attendance, merchandise sold, etc. (50% probability) (.25) x 50 million + (.75) x 50 million = 50 million 1. Tom Brady is a bust - Tampa loses $50 million (25% probability) 2. Tom Brady is successful - $50 million invested in Tom leads to a successful season, higher profits from higher game attendance, merchandise sold, etc. (75% probability) As we know, the latter option proved to be successful. Tom Brady signed a two year, $50 million contract with the Buccaneers. They used remaining money to sign other big name stars to help Tom Brady, which resulted in a Superbowl Win for the organization and proved to be a fantastic decision by the front-office of Tampa Bay. It is not known how much revenue the Buccaneers generated from their victory, but each of the 52 players received an additional $255,000 plus all contract bonuses, and the organization shared in the profits from Superbowl advertisements, which run about ~$5 million per 30 second ad. All in all, this was a wise investment, and Tom Brady is still going strong at 44 years old. https://www.cnbc.com/2019/02/01/the-super-bowl-is-worth-billions-each-year--heres-who-makes-what.html 4. I am currently facing issues with my iPhone X (old phone, short battery life, glitching, etc.). I am not sure whether to be patient and wait for the iPhone 14 to be released next year or buy the iPhone 13. Since Black Friday is soon approaching, I’m hoping its price will decrease, even if its just a few dollars less. Here are my options presented in the table below: Options Expectations Payouts 1. Buy the iPhone 13 now Accept Regular Features Spend Money 2. Do not buy the iPhone 13 now Tolerate a slow phone Save Money 3. Buy the iPhone 14 later Enjoy Advanced Features Spend Money Later 4. Buy an Android whenever current phone completely dies Learn a different operating system Spend Less Money If I proceed with the 3rd option, the risk I am taking in waiting for the iPhone 14 is the additional features that may or may not be implemented. If the iPhone 14 is no different than the 13, I would have one, waisted an entire year dealing with a slow phone that glitches, and two, waisted the opportunity to buy the iPhone 13 at a cheaper price (i.e., option 1). To avoid uncertainty in this situation, I will do a bit of research on the upcoming iPhone 14 to try and foreshadow the new and different features. In addition, I will book an appointment with Apple Care to figure out how much time I really have left with my current iPhone to see whether buying a new one can wait or not. Since I will be spending money either way, the best decision will be to go with the option I feel will give me more value, after measuring all risks, and that is option 3 (I hope).