Suppose that a decision maker faced with four decision alternatives and four states of nature. S/he develops the following consequential table for cost:

Decision States of Nature

Alternative S1 S2 S3 S4

D1 14 9 10 5 D2 11 10 8 7 D3 9 10 10 11 D4 8 10 11 13

a.

b. c.

If the decision maker knows nothing about the probabilities of the four states of nature, what is the recommended decision using the optimistic, pessimistic, and minimax regret approaches?

Which approach do you prefer? Explain in brief

Assume that the payoff table provides profit rather than cost payoffs. What is the recommended decision using the optimistic, pessimistic, and minimax regret approaches?