Decision Making Quiz

Which decision criterion assumes that the most favorable state of nature for each decision alternative will occur?

• Maximax Criterion

• Maximin Criterion

• Minimax Regret Criterion

• Hurwicz Criterion

Which decision criterion selects the decision that will reflect the maximum of the minimum payoffs?

• Maximax Criterion

• Maximin Criterion

• Minimax Regret Criterion

• Hurwicz Criterion

Which decision criterion attempts to avoid regret by selecting the decision alternative that minimizes the maximum regret?

• Maximax Criterion

• Maximin Criterion

• Minimax Regret Criterion

• Hurwicz Criterion

Which decision criterion strikes a compromise between the maximax and maximin criteria?

• Maximax Criterion

• Maximin Criterion

• Minimax Regret Criterion

• Hurwicz Criterion

Which decision criterion assumes that the states of nature are equally likely to occur?

• Equal Likelihood / Laplace Criterion

• Expected Value

• Expected Opportunity Loss

• Expected Value of Perfect Information (EVPI)

Which decision criterion computes the expected value for each decision alternative by multiplying each outcome by the probability of its occurrence and then summing these products?

• Equal Likelihood / Laplace Criterion

• Expected Value

• Expected Opportunity Loss

• Expected Value of Perfect Information (EVPI)

Which decision criterion multiplies the probabilities by the regret (i.e., opportunity loss) for each decision outcome rather than multiplying the decision outcomes by the probabilities of their occurrence?

• Equal Likelihood / Laplace Criterion

• Expected Value

• Expected Opportunity Loss

• Expected Value of Perfect Information (EVPI)

Which decision criterion represents the maximum amount a decision maker would pay for additional information?

• Equal Likelihood / Laplace Criterion

• Expected Value

• Expected Opportunity Loss

• Expected Value of Perfect Information (EVPI)

Which decision criterion is optimistic and selects the decision that will result in the maximum of the maximum payoffs?

• Maximax Criterion

• Maximin Criterion

• Minimax Regret Criterion

• Hurwicz Criterion

Which decision criterion is pessimistic and selects the decision that will reflect the maximum of the minimum payoffs?

• Maximax Criterion

• Maximin Criterion

• Minimax Regret Criterion

• Hurwicz Criterion