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Decision Theory

Terms in this set (6)

the expected monetary value approach is most appropriate when the decision maker is risk neutral.

the maximin approach involves choosing the alternative that has the "best worst" payoff.

The maximax approach is a pessimistic strategy.

in a decision-making setting, if the manager has to contend with limits on the amount of information he or she can consider, this ___________ can lead to a poor decision.

bounded rationality

determining the average payoff for each alternative and choosing the alternative with the highest average is the approach called:

Testing how a problem solution reacts to changes in one or more of the model parameters is called:

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