6 terms
Decision Theory
STUDY
PLAY
the expected monetary value approach is most appropriate when the decision maker is risk neutral.
True
the maximin approach involves choosing the alternative that has the "best worst" payoff.
True
The maximax approach is a pessimistic strategy.
False
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:
laplace
Testing how a problem solution reacts to changes in one or more of the model parameters is called:
simulation