Determining a Least-cost Assignment

---

• A distribution will not be least cost if
  • payoff in state s < payoff in state s+1 and
  • price for state s < price for state s+1

• To find the least-cost of a Distribution
  • order states from lowest to highest state price
  • assign payoffs to states from highest to lowest

• Every distribution is assigned to states automatically using this method
  • guarantees least-cost