Which of the following is a drawback of the minimax regret criterion?
A)It ignores the payoffs associated with the "high demand" state of nature.
B)It ignores the payoffs associated with the "low demand" state of nature.
C)It is not a good method to use when the states of nature are not equally probable.
D)It ignores the maximum payoff that could be realized if the decision maker were a risk taker and the probabilities associated with the possible state of nature.

Question

Quizplus · Accepted Answer

The minimax regret criterion does not consider the maximum payoff that could be realized if the decision maker were a risk taker and the probabilities associated with the possible states of nature. This can be a significant drawback if the decision maker is willing to take risks and potentially achieve higher payoffs.

Which of the Following Is a Drawback of the Minimax