This situation concerns Kelton, the CEO of Pistell-Feiers Squib Pharmaceuticals (PFS). He faces a decision about his newest and most promising drug candidate, Smartiva. Clinical trials have been...

This situation concerns Kelton, the CEO of Pistell-Feiers Squib Pharmaceuticals (PFS). He faces a decision about his newest and most promising drug candidate, Smartiva. Clinical trials have been completed, and the team awaits an approval decision from the U.S. Food and Drug Administration (FDA) before it can be marketed. Kelton was planning to market Smartiva, but he receives an offer from Eli Willy Pharmaceuticals to license Smartiva from PFS. Kelton's decision situation is described in the following tree:

The PFS DA team has not yet elicited Kelton's probability of FDA approval, which is denoted by "p" in the decision tree. However, they know that he follows the delta property over prospects of ± $ 10 Billion. Also, they recently elicited the following deal from Kelton.