Depending on the weather and the amount of advertising, Kyle has developed six scenarios for his summer profits from his lawn care business. His business has failed to reach his expectations in the past, so he fears the worst. Kyle will likely choose the option that ________.
A) maximizes the maximum possible payoff
B) maximizes the minimum possible payoff
C) minimizes the maximum regret
D) minimizes the minimum losses

Question

Quizplus · Accepted Answer

Kyle's fear of not meeting expectations suggests he would prefer a strategy that ensures the best outcome among the worst-case scenarios, which is to maximize the minimum possible payoff. This approach is known as a maximin strategy, focusing on making the best of the worst-case scenario.

Depending on the Weather and the Amount of Advertising, Kyle