Question

A local real estate investor in Orlando is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions.
The following payoff table shows the profit or loss that could result from each investment:


Determine the best investment, using the following decision criteria.
a. Maximax
b. Maximin
c. Minimax regret
d. Hurwicz (α = .4)
e. Equallikelihood


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  • CreatedJuly 17, 2014
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