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State of Nature Decision s 1 s 2 s 3 d 1 10 8 6 d 2 14 15 2 d 3 7 8 9

State of Nature

Decision

s1

s2

s3

d1

10

8

6

d2

14

15

2

d3

7

8

9

a. What decision should be made by the optimistic decision maker?

a. d1 b. d2 c. d3

b. What choice should be made by the conservative decision maker?

a. d1 b. d2 c. d3

c. What decision should be made under minimax regret?

a. d1 b. d2 c. d3 d. any decision (d1, d2, or d3) e. no decision

d. What is the payoff under the REGRET decision (MINMAX REGRET)?

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