#OperationsResearch #Math  #Statistics #DecisionTheory #DecisionMaking #Maximax #Maximin #Payoff #FreeLecture #FreeStudy #Solution

Decision making under uncertainty -
These problems deals with the selection of a course of action when we do not know with certainty the results each alternative action will yield. In fact these are the problems frequently faced in real life as we usually can have an expected figure of outcome of future events and rarely have definitive results of future outcomes.
We can study these problems under two heads:
(a) Decision making under uncertainty without use of probability
(b) Decision making under uncertainty using probability.
Decision-making under uncertainty without use of probability - There are several criteria, which do not require the assignment of probabilities in order to reach a decision. The common non-probabilistic criteria are:
A. Criteria based on payoffs
1. Maximax payoff
2. Maximin payoff
3. Horwich principle
4. Laplace principle

Maximax Payoff Criteria [i.e. maximum…