Question

Using the below table, Fill in the regret table
Success Moderate Success Failure
Sell Company 150 150 150
Form Joint Venture 500 492.00 63.00
Sell Software on own 833.00 400 -500

Regret Table Success Moderate Success Failure
Sell Company
Form Joint Venture
Sell Software on own


Based on the MiniMax Regret Method, what is the value for the Decision Alternative Form Joint Venture

Answer 1

First compute column maxima:
- Success: max = 833
- Moderate Success: max = 492
- Failure: max = 150

Regret = column max − payoff.

Regret table:
- Sell Company: Success 833−150 = 683; Moderate 492−150 = 342; Failure 150−150 = 0
- Form Joint Venture: Success 833−500 = 333; Moderate 492−492 = 0; Failure 150−63 = 87
- Sell Software on own: Success 833−833 = 0; Moderate 492−400 = 92; Failure 150−(−500) = 650

So the filled table:

Regret Table
- Sell Company: 683, 342, 0
- Form Joint Venture: 333, 0, 87
- Sell Software on own: 0, 92, 650

The Maxi regret for Form Joint Venture = max(333, 0, 87) = 333. Under the MiniMax Regret method, Form Joint Venture is the chosen alternative (its maximum regret 333 is the smallest).