Question5. Define following criteria’s used for decision making under Uncertainty a. Optimism (maximax or minimin) criterion
Answer 5(a).
Maximax (Optimist)
The maximax looks
- Pessimism (maximin or minimax) criterion
Answer5(b).
Maximin (Pessimist)
The maximin person looks at the worst that could happen under each action and then choose the
- Equal probabilities (Laplace) criterion
Answer5(c).
Laplace criterion is also called as law of equal probabilities criterion or criterion of rationality, since probability of states of nature are not known it is assumed that all states of nature will
- Coefficient of optimism (Hurwicz) criterion
Answer5(d).
A compromise between the maximax and maximin criteria. The decision maker is neither totally optimistic (as the maximax criterion assumes) nor totally pessimistic (as the maximin
- Regret (salvage) criterion
Answer5(e).
The minimization of regret that is highest when one decision has been made instead of
