Quantitative Methods and Decision Theory: Payoff Table and Mini-max Regret
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The following payoff table shows the profit for a decision problem with three states of nature and two decision alternatives:
State of Nature
DA s1 s2 s3
d1 -20 40 100
d2 10 45 70
I need to make a decisions using the mini-max regret approaches and justify the decisions?
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Solution Summary
This solution walks the student through the mini-max regret approach for the table matrix decision.
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In order to find the best decision using the mini-max regret approach, then we must start by find the Regret values for each state of nature.
The regret for a decision given a state of nature is the difference between the payoff of that decision, and the payoff from the best ...
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