Operations research
Cheat sheet
Decision Under Uncertainty on One Card
Decision making under uncertainty, on one card. Screenshot this.
Quick check · tap an answer to continue
Lesson notes
Key points
- Payoff table: Rows are your actions, columns are states of nature, cells are payoffs.
- Maximax: The optimist: pick the action with the best possible payoff.
- Maximin: The pessimist: pick the action whose worst payoff is the least bad.
- Minimax regret: Build a regret table, then minimise your largest possible regret.
- Laplace: Treat every state as equally likely and pick the best average payoff.
- EMV: With known probabilities, pick the highest probability-weighted payoff.
Takeaway: No probabilities: maximax, maximin, regret. Probabilities: EMV.
Quick check: Which criterion chooses the action with the best worst-case payoff?
- Maximax
- Maximin
- Laplace
Maximin maximises the minimum payoff, the pessimist's rule.
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