Which of the following is the correct definition of the maximin decision rule?
1. Under this rule, the decision maker selects the alternative which maximizes the minimum payoff achievable.
2. Under this rule, the decision maker selects the alternative which offers the most attractive worst outcome, i.e, the alternative which maximises the minimum profit.
– The answer is 2 -Could you explain what’s wrong with 1?
I don’t know where you found this question, but I can only imagine that they are playing with words. You can’t maximise the minimum payoff for any one alternative. However it would be silly for them to play with words in this way in the real exam.