Consider the payoff table in problem 7.The optimal decision under the minimax regret criterion is:
A)D1
B)D2
C)D3
D)D4

Question

Quizplus · Accepted Answer

The minimax regret criterion minimizes the maximum regret. The regret for each decision is the difference between the payoff for that decision and the maximum payoff for the row. The maximum regret for D1 is 0, for D2 is 1, for D3 is 2, and for D4 is 3. Therefore, the optimal decision under the minimax regret criterion is D1.

Consider the Payoff Table in Problem 7