This regret matrix gives potential dollar values in thousands for strategies S1, S2, S3, and S4 for Al's Fish Fry and competitive strategies CA1, CA2, and CA3 for Sal's Fish Bake.If Al wants to minimize his maximum regret, which strategy should he choose? CA1 CA2 CA3
S1 3 15 9
S2 12 10 12
S3 8 9 17
S4 13 16 3
A)S4
B)S3
C)S2
D)S1

Question

Quizplus · Accepted Answer

To determine the best strategy for Al to choose, we need to calculate the regret for each strategy and competitive strategy combination. Regret is the difference between the best outcome for Al and the outcome for a particular strategy.

Regret matrix:

CA1    CA2    CA3       MAX Regret
S1     -3     -15   -9          15
S2     -12     0     -12        12
S3     -8     -9     0           9
S4     -13    -16    -3          16

In this case, Al's goal is to minimize the maximum regret, so he should choose the strategy with the smallest maximum regret, which is S2. If Al chooses S2, the worst possible outcome he can get is a regret of 12, which is smaller than the maximum regret of any other strategy. Therefore, Al should choose S2.

This Regret Matrix Gives Potential Dollar Values in Thousands for Strategies