This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company.From Bigg's point of view, the S1 maximum regret for CA2 is 8.

Question

Quizplus · Accepted Answer

The maximum regret for a strategy is the difference between the highest possible payoff and the payoff obtained from the chosen strategy. In this case, the maximum regret for S1 and CA2 can be calculated as follows: 
- If Bigg chooses S1 and Large chooses CA2, the payoff is -8. 
- The highest possible payoff for Bigg when Large chooses CA2 is 0, which is obtained by choosing S3. 
Therefore, the maximum regret for S1 and CA2 is 0 - (-8) = 8, not the other way around.

This Payoff Matrix Gives Values for Strategies S1, S2, and S3