Risk Navigator SRM: An Applied Risk Management Tool

Table 4

Attributes of basic decision rules${}^a$.

Decision Rule	Mean	Variation	Low	High	Other
Maximized Expected Value—Choose alternative with highest expected value	$\text{x}$
Maximax—Choose alternative with best outcome				$\text{x}$
Most Likely—Choose alternative that is most likely to occur (subjective)					$\text{x}$
Minimax Regret—Choose alternative with least hindsight regret		$\text{x}$	$\text{x}$
Hurwicz—Weighted average of maximax and minimax			$\text{x}$	$\text{x}$
Maximin—Choose alternative with best of the worst outcomes			$\text{x}$
Laplace—Simple average	$\text{x}$

${}^{\text{a}}$See a more detailed description in [6]. An $\text{x}$ is placed in the column where the rule is primarily focused.