For a particular maximization problem, the payoff for best ...

[rlane42]

For a particular maximization problem, the payoff for best decision alternative is 15.7 million while the payoff for one of the other alternatives is 12.9 million. The regret associated with the alternate decision would be
 a. 28.6 million. b. 15.7 million.
  c. 0.129 million. d. 2.8 million.

Question 2

The minimax regret approach is
 a. purely optimistic.
  b. purely conservative.
  c. both purely optimistic and purely conservative.
  d. neither purely optimistic nor purely conservative.

[braelync]

Answer to Question 1

d
RATIONALE: In decision analysis, the regret for a particular decision alternative is the absolute difference between the payoff associated with the best decision alternative and the payoff associated with the chosen decision alternative. In this case, the regret would be 15.7 million  12.9 million = 2.8 million.

Answer to Question 2

d
RATIONALE: The minimax regret approach is neither purely optimistic nor purely conservative.