Consider the Decision Analysis Problem with States of Nature S_i

question 17

Short Answer

Consider the decision analysis problem with states of nature S_i, decision alternatives A_j, and the following payoff table: $\begin{array}{llll}&\mathbf{S 1} & \text { S2 } & \text { S3 } & \text { S4 } \\A1&55 & 51 & 50 & 38 \\A2&39 & 42 & 42 & 48 \\A3&45 & 59 & 57 & 35\end{array}$ What is the preferred alternative when using the:
A.maximin criterion?
B.maximax criterion?
C.minimax regret criterion?
D.principle of insufficient reason?

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Definitions:

Marginal Benefit

The additional satisfaction or utility gained by consuming an extra unit of a good or service.

Diamond

A naturally occurring gemstone composed of carbon, known for its hardness and brilliance, often used in jewelry.

Marginal Analysis

The examination of the costs and benefits of a small (marginal) change in the production of goods or services.

Wheat Farmer

An individual or entity engaged in the cultivation of wheat crops for consumption or sale.