Flashcards in Decision Making Deck (10)

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1

## Decision Criteria

###
Maximum Benefit

Minimax Regret

Maximax benefit

2

## Maximax Benefit

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Optimistic

Risk taking

The "highest" maximum benefit

Chose the maximum from the options, then chose the maximum of those

3

## Maximin Benefit

###
Pessimistic

Risk averse

The "highest" minimum benefit

Chose the minimum from the options, then chose the maximum of those

4

## Minimax Regret

###
The "lowest" maximum regret

Opportunity loss for each possible purchase

For each state choose the maximum from the options, then calculate the loss from choosing an alternative

Regret table

5

## Hurwicz Criterion

###
Degree of optimism

Consider best and worst outcome under uncertainty

Optimistic to a degree of a

Pessimistic to a degree of (1-a)

Realistic view

6

## Decision Making with probability

### Multiply payoff by probability of option occurring

7

## Square in a decision tree

### Decision Node

8

## Circle in a decision tree

### Outcome Node

9

## Expected Monetary Value (EMV)

###
Lottery

Expected return

Payoff multiplied by probability

10