Consider the Following Payoff Table in Which D1 Through D4

question 15

Multiple Choice

Consider the following payoff table in which D1 through D4 represent decisions, S1 through S4 represent states of nature, and the values in the cells represent profits. $\begin{array}{c}\begin{array}{c}\\ \text { D1 } &\\ \text {D2 } &\\ \text {D3} &\\ \text {D4} &\\\end{array}\begin{array}{|c|c|c|c|}\hline \text { S1 } & \text { S2 } & \text { S3 } & \text { S4 } \\\hline-20 & 40 & 60 & 100 \\\hline 30 & 120 & 60 & -50 \\\hline 30 & 30 & 40 & 40 \\\hline 10 & -60 & 80 & 70 \\\hline\end{array}\end{array}$
The optimal decision under the maximax criterion is:

• A)D1
• B)D2
• C)D3
• D)D4

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Definitions:

Coercive Power

The ability to compel or force someone to do something through threats or force.

Legitimate Power

Power that is officially sanctioned by an organization or institution, and is accepted by members as rightly exercised.

Reward Power

The ability of a person to influence others' actions, behaviors, or attitudes by offering them something desirable.

Salary Raises

Incremental increases in wages given to employees, typically as a reward for performance, tenure, or to adjust for market conditions.