Which one of the following criteria is not used for decision-making under uncertainty ?
Decision-making under pure uncertainty (where probabilities of states of nature are completely unknown) relies on non-probabilistic criteria such as Maximin (Wald), Maximax,…
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Which one of the following criteria is not used for decision-making under uncertainty ?
Answer and explanation
Correct answer D
Decision-making under pure uncertainty (where probabilities of states of nature are completely unknown) relies on non-probabilistic criteria such as Maximin (Wald), Maximax, Minimax Regret (Savage), Hurwicz, and Laplace. 'Minimize expected loss' (Expected Opportunity Loss) requires known probability distributions and is therefore a criterion for decision-making under risk.
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