Refer to the following:
The following payoff matrix shows the various profit outcomes for 3 projects, A, B, and C, under 2 possible states of nature: the product price is $10 or the product price is $20.
$\begin{array}{l}
\text { Profit }\
\begin{array}{l|c|c|}
\hline \text { Project }&P=\$ 10 & P=\$ 20 \
\hline A&20 & 80 \
\hline B&40 & 60 \
\hline C&-26 & 140 \
\hline
\end{array}
\end{array}$
-Using the minimax regret rule the decision maker would choose
A) A.
B) B.
C) C.
D) impossible to tell from the information

Question

Refer to the following:
The following payoff matrix shows the various profit outcomes for 3 projects, A, B, and C, under 2 possible states of nature: the product price is $10 or the product price is $20.
 $\begin{array}{l}
\text { Profit }\
\begin{array}{l|c|c|}
\hline \text { Project }&P=\$ 10 & P=\$ 20 \
\hline A&20 & 80 \
\hline B&40 & 60 \
\hline C&-26 & 140 \
\hline
\end{array}
\end{array}$
-Using the minimax regret rule the decision maker would choose
A) A.
B) B.
C) C.
D) impossible to tell from the information

Quizplus · Accepted Answer

The minimax regret rule minimizes the maximum regret. The regret for each project is the difference between the profit for that project and the maximum profit for any project. The maximum regret for project A is 60, for project B is 20, and for project C is 166. Therefore, the minimax regret rule would choose project A.

Refer to the Following: the Following Payoff Matrix Shows the Various

Refer to the Following:
the Following Payoff Matrix Shows the Various