A farmer in Iowa is considering either leasing some extra land or investing in savings certificates at the local bank. If weather conditions are good next year, the extra land will give the farmer an excellent harvest. However, if weather conditions are bad, the farmer will lose money. The savings certificates will result in the same return, regardless of the weather conditions. The return for each investment, given each type of weather condition, is shown in the following payoff table: Decision Good  Bad Lease land 90,000 -40,000 Buy savings certificate 10,000 10,000                                                   Select the best decision, using the following decision criteria: Maximax   Maximin

MATLAB: An Introduction with Applications
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  1. A farmer in Iowa is considering either leasing some extra land or investing in savings certificates at the local bank. If weather conditions are good next year, the extra land will give the farmer an excellent harvest. However, if weather conditions are bad, the farmer will lose money. The savings certificates will result in the same return, regardless of the weather conditions. The return for each investment, given each type of weather condition, is shown in the following payoff table:
Decision Good  Bad
Lease land 90,000 -40,000
Buy savings certificate 10,000 10,000

                                      

           Select the best decision, using the following decision criteria:

  1. Maximax

 

  1. Maximin

 

 

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