Decision Theory: Maximax, Minimax, Minimax Regret, and Average Payoff
Video - Decision Analysis 1: Maximax, Maximin, Minimax Regret
Discussion: Using Decision Theory in the Public Sector
Maximin, maximax, and minimax are all approaches in decision theory. A maximin approach might be for someone who looks for the best pay-off for the worst-case scenario. Conversely, a maximax approach is for someone who is a risk-taker looking for the best result in the best-case scenario. A minimax approach may be used when making a decision that is risk-neutral. Are you a risk-taker? Or, would you rather minimize risks? Do your decisions vary from situation to situation, or are you consistent in the approach you take in decision making?
For this Discussion, you consider maximin, maximax, or minimax decision approaches when making decisions in the public sector.
To prepare:
Review the Learning Resources for the week, including the media. Focus on "An Introduction to Decision Theory." Then, concentrate on pages 20-1 through 20-8. As you read through the document, you will notice that the examples relate to the private sector, but still apply to the public sector.
Post a description of a public-sector example, for where you currently work or in which you have interest, where you might use decision theory. Explain whether the conditions of the situation might lead you to use a maximin, maximax, or minimax decision approach. Include why you think the approach you have chosen is the most appropriate.