Question: Suppose that a decision maker faced with four decision alternatives and four states of nature develops the following profit payoff table.

a.) If the decision maker knows nothing about the probabilities of the four states of nature, what is the recommended decision using the optimistic, conservative, and minimax regret approaches? = Optimistic: d1 ; Conservative: d3 ; Minimax regret: d3

b.) Which approach do you prefer? Explain. Is establishing the most appropriate approach before analyzing the problem important for the decision maker? Explain.

c.) Assume that the payoff table provides cost rather than profit payoffs. What is the recommended decision using the optimistic, conservative, and minimax regret approaches? = Optimistic: d1 ; Conservative: d2 or d3 ; Minimax regret: d2