Matrix below indicates PROFIT expected from 4 alternatives under 4 states of nature. Determine whichalternative is dominant using With and Without Probability (use a = 0.3 and probability of: 30% 20%;40% & 10% for S1, S2, S3, and 54 respectively): Wich alternative is best using minimax regret?Alternatives53S4A1A2A3A4S110121513S2201518161825193015202518

*Answer: Minimax strategy: We apply the minimax principle (as the profit function needs to be…

Answered: 10% for 51, 52, 53, and 54…

10% for 51, 52, 53, and 54 respectively): Wich alternative is best using minimax Alternatives Al A2 A3 A4 51 10 12 15 15 18 16 25 19 30

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Matrix below indicates PROFIT expected from 4 alternatives under 4 states of nature. Determine which
alternative is dominant using With and Without Probability (use a = 0.3 and probability of: 30% 20%;
40% & 10% for S1, S2, S3, and 54 respectively): Wich alternative is best using minimax regret?
Alternatives
53
S4
A1
A2
A3
A4
S1
10
12
15
13
S2
20
15
18
16
18
25
19
30
15
20
25
18

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