This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza.If Sam chooses S3, how is he feeling about the business climate? CA1 CA2 CA3
S1 13 14 7
S2 7 17 12
S3 31 29 4
S4 20 12 21
A)Sam is feeling pessimistic because he has chosen a maximax strategy.
B)Sam is feeling pessimistic because he has chosen a minimax strategy.
C)Sam is feeling optimistic because he has chosen a maximax strategy.
D)Sam is feeling optimistic because he has chosen a maximin strategy.

Question

Quizplus · Accepted Answer

Choosing a maximax strategy means that Sam is selecting the option with the highest potential dollar gain. In this case, Option S3 has the highest potential gain for all three competitive strategies. This suggests that Sam is feeling optimistic about the business climate, as he believes that his decision will lead to the highest potential payoff.

This Payoff Matrix Gives Potential Dollar Gain Values in Thousands