How can the maximin criterion be described?Maximizing the minimum possible payoff.Maximizing the maximum possible payoff.Minimizing the maximum possible loss.Minimizing the average possible loss
Question
How can the maximin criterion be described?Maximizing the minimum possible payoff.Maximizing the maximum possible payoff.Minimizing the maximum possible loss.Minimizing the average possible loss
Solution
The maximin criterion can be described as a decision rule used for minimizing the possible loss for a worst case (maximum loss) scenario. When dealing with gains, it is "maximizing the minimum possible gain". Essentially, under this criterion, the decision maker looks at the worst possible outcome for each decision and then chooses the decision which "maximizes" the "minimum" outcome. This is a conservative decision-making rule, often used in theories of social justice and in decision making under uncertainty.
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