1. What are some of the reasons for poor decisions?
2. Explain or define each of these terms:
a. Laplace criterion.
b. Minimax regret.
c. Expected value.
d. Expected value of perfect information
3. What information does a decision maker need in order to perform an expected-value analysis of
a problem? What options are available to the decision maker if the probabilities of the states of
nature are unknown? Can you think of a way you might use sensitivity analysis in such a case?