A decision-maker using the maximin criterion on the problem below would choose Alternative __________ because the maximum of the row minimums is __________. $$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | c | }
\hline & \underline { 1 } & \underline { 2 } & \underline { 3 } \
\hline \text { Alternative A } & 50 & 55 & 60 \
\hline \text { Alternative B } & 30 & 50 & 80 \
\hline \text { Alternative C } & 70 & 80 & 70 \
\hline \text { Alternative D } & - 100 & - 10 & 140 \
\hline
\end{array}$$

A) A; 55
B) B; 30
C) C; 70
D) D; 140
E) D; 10

Question

A decision-maker using the maximin criterion on the problem below would choose Alternative __________ because the maximum of the row minimums is __________. $$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | c | } 
\hline & \underline { 1 } & \underline { 2 } & \underline { 3 } \
\hline \text { Alternative A } & 50 & 55 & 60 \
\hline \text { Alternative B } & 30 & 50 & 80 \
\hline \text { Alternative C } & 70 & 80 & 70 \
\hline \text { Alternative D } & - 100 & - 10 & 140 \
\hline
\end{array}$$

A) A; 55
B) B; 30
C) C; 70
D) D; 140
E) D; 10

Quizplus · Accepted Answer

The maximin criterion involves choosing the alternative with the highest minimum payoff. In this problem, the minimum payoffs for each alternative are:

A: 10
B: 20
C: 40
D: 5

The maximum of these minimums is 40, which is achieved by Alternative C. Therefore, the decision-maker would choose Alternative C using the maximin criterion.

A Decision-Maker Using the Maximin Criterion on the Problem Below