Maximax
Maximax chooses the option with the highest possible payoff when probabilities are not used in the decision rule. For each alternative, identify its best outcome, then select the largest of those outcomes. It represents an optimistic focus on upside, not a universal rational policy for every person described as risk-seeking. Assess downside exposure, feasibility and organisational risk constraints separately.
Worked example
Option A pays 100 or 20; B pays 70 or 60. Best outcomes are 100 and 70, so maximax selects A.
Common mistake
Do not calculate an expected value when applying this rule or assume the best state of nature is under the manager’s control.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | PM | Direct | September 2026–June 2027 |
