This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.If Sam chooses S3, how is he feeling about the business climate?
A)Sam is feeling pessimistic because he has chosen a maximax strategy.
B)Sam is feeling pessimistic because he has chosen a minimax strategy.
C)Sam is feeling optimistic because he has chosen a maximax strategy.
D)Sam is feeling optimistic because he has chosen a maximin strategy.

Question

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.If Sam chooses S3, how is he feeling about the business climate? 
A)Sam is feeling pessimistic because he has chosen a maximax strategy. 
B)Sam is feeling pessimistic because he has chosen a minimax strategy. 
C)Sam is feeling optimistic because he has chosen a maximax strategy. 
D)Sam is feeling optimistic because he has chosen a maximin strategy.

Quizplus · Accepted Answer

If Sam chooses S3, his potential gain is $150,000 if Pam chooses CA1 or CA2, and $130,000 if Pam chooses CA3. This means that Sam is choosing a maximax strategy, which suggests that he is feeling optimistic about the business climate and confident that he can make the most profit by choosing the highest potential gain option.

This Payoff Matrix Gives Potential Dollar Gain Values in Thousands