Decision Making Without Probabilities: Optimistic, Conservative & Minimax Approaches

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

The passage of new regulations and laws often impacts a business' profitability. These regulations are an example of:

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1. The _____ approach to making business decisions involves choosing the option with the largest possible payoff or smallest possible cost.

2. The _____ approach to making business decisions involves figuring out which option has the best chance across different states of nature.

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About This Quiz & Worksheet

This quiz and corresponding worksheet will check your comprehension of decision making without probabilities. Topics focus on the optimistic, conservative, and minimax approaches. Quiz topics include the major characteristic of an optimistic approach and minimax regret.

Quiz & Worksheet Goals

You will need to know the following:

  • Another term for decision-making without probabilities
  • Major characteristic of the conservative approach
  • Premise of decisions that are made without probabilities

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information given about decision making approaches
  • Distinguishing differences - compare and contrast topics from the lesson, such as the differences between a conservative approach and an optimistic approach
  • Knowledge application - use your knowledge to identify minimax regret

Additional Learning

If you would like to learn more about this topic, review the lesson called Decision Making Without Probabilities: Optimistic, Conservative & Minimax Approaches. This lesson covers the following objectives:

  • Analyze and compare the three major decision making approaches
  • Define and discuss the concept of decision making without probabilities
  • Review the bakery shop example used in the lesson to get a better understanding of how these approaches apply to real life situations
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