February 2016
Intermediate to advanced
480 pages
219h 58m
English
The types of decisions people make depend on how much knowledge or information they have about the situation. There are three decision-making environments:
LO A.3 Explain when to use each of the three types of decision-making environments
Decision making under uncertainty
Decision making under risk
Decision making under certainty
When there is complete uncertainty as to which state of nature in a decision environment may occur (i.e., when we cannot even assess probabilities for each possible outcome), we rely on three decision methods:
Maximax: This method finds an alternative that maximizes the maximum outcome for every alternative. First, we find the maximum outcome ...