Which of the following is a decision-making approach used when the probabilities of the states of nature are unknown,assumed as equal,and the different decision alternatives should be evaluated using the expected value of their payoffs?
A)maximax criterion
B)Laplace criterion
C)maximin criterion
D)Hurwicz criterion

Question

Quizplus · Accepted Answer

The Laplace criterion assumes equal probabilities for all states of nature and calculates the expected value of each decision alternative's payoffs. This approach is useful when there is no reliable data available on the probability of different states of nature.

Which of the Following Is a Decision-Making Approach Used When