Situations in which:

1. probabilities cannot be assigned to future occurrences
2. Situations in which probailites can be assigned

payoff table 

is a means of organizing a decision situation, presenting the payoffs from different decisions given the various states of nature.

maximax criterion

the decision maker selects the decision that will result in the maximum of maximum payoffs; an optimistic criterion.

maximin criterion 

the decision maker selects the decision that will reflect the maximum of the minimumpayoffs; a pessimistic criterion.

Regret is: 

avoid regret by: 

Hurwicz criterion: 

is a compromise between the maximax and maximin criteria

coefficient of optimism, a:

is a measure of the decision maker’s optimism

Hurwicz criterion multiplies: 

the best payoff by aand the worst payoff by 1- a, for each decision, and the best result is selected

equal likelihood( or Laplace) criterion

multiplies the decision payoff for each state of nature by an equal weight, thus assuming that the states of nature are equally likely 

dominant decision is 

Expected value is: