Decision Making Analysis

Pick and analyze a decisions problem of his own. The decision problems should have the following characteristics:

  1. Independent alternatives, each of its own characteristics and possible payoffs. The alternatives should be independent and mutually exclusive (i.e., only one alternative is to be selected).
  2. States of nature (at least two) for which the outcome of each alternative may differ.
  3. Probabilities of the states of nature; you may use historical data, technical reports, literature, surveys, to estimate the probabilities.
  4. Realistic decision problems of your workplace are more preferred.
  5. You should solve the decision problem using:
    a. Optimistic
    b. Pessimistic
    c. Minimum regret
    d. Risk neutral