Suppose that a decision maker faced with four decisions alternatives and four state of nature developing the following profit payoff table: Outcomes Alternatives S1 S2 S3 S4 A1 14 9 10 5 A2 11 10 8 7 A3 9 10 10 11 A4 8 10 11 13 Use Maximax, Maximin, Criterion of realism (? = 0.55, and ? = 0.4), Laplace, and Minimax regret to find the best alternative.
Suppose that a decision maker faced with four decisions alternatives and four state of nature developing the following profit payoff table: Outcomes Alternatives S1 S2 S3 S4 A1 14 9 10 5 A2 11 10 8 7 A3 9 10 10 11 A4 8 10 11 13 Use Maximax, Maximin, Criterion of realism (? = 0.55, and ? = 0.4), Laplace, and Minimax regret to find the best alternative.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that a decision maker faced with four decisions alternatives and four state of nature developing the following profit payoff table:
Outcomes | ||||
Alternatives | S1 | S2 | S3 | S4 |
A1 | 14 | 9 | 10 | 5 |
A2 | 11 | 10 | 8 | 7 |
A3 | 9 | 10 | 10 | 11 |
A4 | 8 | 10 | 11 | 13 |
Use Maximax, Maximin, Criterion of realism (? = 0.55, and ? = 0.4), Laplace, and Minimax regret to find the best alternative.
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