The maximin criterion refers to:
A) minimizing the maximum return.
B) maximizing the minimum return.
C) choosing the alternative with the highest payoff.
D) choosing the alternative with the minimum payoff.
E) None of the answer choices is correct.

Question

Quizplus · Accepted Answer

The maximin criterion is used in decision-making under uncertainty and assumes that the decision-maker is risk-averse. It involves choosing the alternative with the highest minimum payoff or outcome. This ensures that even in the worst-case scenario, the decision-maker will still receive a satisfactory outcome.

The Maximin Criterion Refers To