import numpy as np import matplotlib.pyplot as plt def expected_value(prob_storm, sensitivity, specificity, prob_mold, prob_high_sugar, prob_low_sugar, prob_regular_sugar): payout_matrix = np.matrix([6000*5+2000*10+2000*15, 5000*5+1000*10+2000*120, 5000*5+1000*10, 4000*5+2500*10+2000*15+1000*30+500*40, 6000*5+2000*10+2000*15, 5000*5+1000*10+2500*15+1500*30]) payout_matrix = payout_matrix * 12 def s_branch(payout_matrix,prob_mold): return(prob_mold * payout_matrix[0,1] + (1-prob_mold) * payout_matrix[0,2]) def ns_branch(payout_matrix,prob_high_sugar,prob_low_sugar,prob_regular_sugar): return(prob_high_sugar * payout_matrix[0,3] + prob_low_sugar*payout_matrix[0,4] + prob_regular_sugar*payout_matrix[0,5]) P_DS = sensitivity * (prob_storm) + (1-sensitivity) * (1-prob_storm) P_DNS = specificity * (1-prob_storm) + (1-specificity) * prob_storm P_S_DS = (sensitivity * prob_storm)/P_DS P_NS_DS = 1 - P_S_DS E_val_top = [] E_val_top.append(payout_matrix[0,0]) E_val_top.append(s_branch(payout_matrix,prob_mold) * P_S_DS + P_NS_DS * ns_branch(payout_matrix,prob_high_sugar,prob_low_sugar,prob_regular_sugar)) P_NS_DNS = (specificity * (1-prob_storm))/P_DNS P_S_DNS = 1-P_NS_DNS E_val_bot = [] E_val_bot.append(payout_matrix[0,0]) E_val_bot.append(s_branch(payout_matrix,prob_mold) * P_S_DNS + P_NS_DNS*ns_branch(payout_matrix,prob_high_sugar,prob_low_sugar,prob_regular_sugar)) result = np.max(E_val_top) * P_DS + np.max(E_val_bot)* (1-P_DS) return (result - payout_matrix[0,0])