Decision Making Under Uncertainty: 5 Decision Rules

Overview

When you face several possible states of nature but have no probabilities, you cannot use expected value, so you fall back on decision rules that encode a risk attitude. This documentation page works all five classic rules - Maximin, Maximax, Minimax Regret, Hurwicz, and Laplace - on one consistent plant-size payoff table, shows why the same table can give three different answers, and explains when to use each, with every number verified.

This is a draft. The full body (payoff table, regret table, and each rule worked: Maximin = Small at 80, Maximax = Large at 200, Minimax Regret = Medium at 60, Hurwicz alpha 0.6 = Large at 112, Laplace = Medium at 103.33) is generated and ready to expand here; the paired video plan is attached.