MINIMAX regret method
Minimax method assumes that the decision maker will experience 'regret' after he has made the decision and the events have happened. The decision maker chooses the alternative which minimizes the maximum possible regret.
Illustration
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Regret table in £ 000's
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Boom condition
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Steady state
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Recession
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Mini regret row maxima
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Product A
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8
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5
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22
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22
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Product B
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18
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0
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0
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18
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Product C
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0
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6
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38
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38
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A regret table is constructed based upon the pay off table. The regret is the 'opportunity losses from taking one decision given that a specific contingency happens in our illustration where there is boom steady state or recession
The ranking by using MINIMAX regret method = BAC