Publishing as Prentice HallTable 12.5 Regret table In the maximin criterion the decision maker selects the decision that will reflect the maximum of the minimumpayoffs a pessimistic criterion.ĭecision Making without ProbabilitiesMaximin Criterionġ2-9Copyright 2013 Pearson Education, Inc. Table 12.4 Payoff table illustrating a maximin decision In the maximax criterion the decision maker selects the decision that will result in the maximum of maximum payoffs an optimistic criterion.ĭecision Making without ProbabilitiesMaximax Criterionġ2-8Copyright 2013 Pearson Education, Inc. Table 12.3 Payoff table illustrating a maximax decision Table 12.2 Payoff table for the real estate investmentsģ12-7Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hallĭecision AnalysisDecision Making without Probabilities Publishing as Prentice Hallĭecision AnalysisDecision Making Without Probabilitiesįigure 12.1 Decision situation with real estate investment alternativesġ2-6Copyright 2013 Pearson Education, Inc. Presenting the payoffs from different decisions given the various states of nature.ĭecision AnalysisComponents of Decision Makingġ2-5Copyright 2013 Pearson Education, Inc. A payoff table is a means of organizing a decision situation, Publishing as Prentice HallĪ state of nature is an actual event that may occur in the future. Probabilities can be assigned to future occurrences Probabilities cannot be assigned to future occurrencesĢ12-4Copyright 2013 Pearson Education, Inc. This chapter relaxes the certainty assumption Two categories of decision situations: Previous chapters used an assumption of certainty with regards to problem parameters.
Publishing as Prentice HallĬomponents of Decision Making Decision Making without Probabilities Decision Making with Probabilities Decision Analysis with Additional Information Utilityġ2-3Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hallġ2-2Copyright 2013 Pearson Education, Inc. 112-1Copyright 2013 Pearson Education, Inc.