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In Decision Making, which criterion is a compromise between an optimistic and pessimistic decision?
Criterion of pessimism
Criterion of confidence
Criterion of minimization
Criterion of Realism
Criterion of Optimism
- Criterion of Pessimism: This criterion involves assuming the worst-case scenario for each decision. It is often referred to as the Maximin strategy, where the decision maker focuses on minimizing potential losses.
- Criterion of Confidence: This criterion is not typically utilized in classic decision theory. Confidence would imply a decision based heavily on belief systems, which is not a standard term in such contexts.
- Criterion of Minimization: This criterion refers to minimizing potential losses or costs. It's often related to risk-averse strategies.
- Criterion of Realism (Correct Answer): This criterion is also known as the Hurwicz Criterion. It provides a balance between optimism and pessimism by assigning a coefficient of realism (alpha) that determines the weight given to the best and worst outcomes.
- Criterion of Optimism: This involves selecting the option with the best possible outcome, focusing on the best-case scenario and is often called the Maximax criterion.
By: Parvesh Mehta ProfileResourcesReport error
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