Question: A business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff (profit in thousands of dollars) table based on whether business in brisk, medium, or slow.

Business Level

Decision Brisk Medium Slow

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Buy 90 70 10

Rent 70 60 40

Lease 60 55 50

1. What is the best decision using the maximax criterion?
2. What is the best decision using the maximin criterion?
3. What is the best decision using the minimax regret criterion?
4. What is the best decision using the Hurwicz’s criterion if α = 0.5?

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