1

A charity fund-raiser has found that active soliciting gains \$5 contributions with probability .7 and passive soliciting gains \$10 contributions with probability .4. No other contributions are made. What strategy should be pursued to gain the maximum contributions?

I'm fairly sure that the strategy needs to be a mixture of active and passive soliciting, but I do not know how to calculate the proportion for each.

UserX
  • 651

1 Answers1

2

Expected value of active soliciting $\$5\cdot0.7=\$3.5$, and expected value of passive solciting $\$10\cdot0.4=\$4$. So, if we take this as criterion, then passive soliciting has higher mean expected gains and should be prefered.

Jimmy R.
  • 35,868