Statıstıcs Iı Deneme Sınavı Sorusu #974829
In Hurwicz criterion, if the value of coefficient of optimism is equal to 1, what is the state of the mind of decision maker?
Pessimistic |
Realistic |
Doubtful |
Optimistic |
Cost effective |
In a paper in 1951, Leonard Hurwicz suggested a new method that balances the optimism and pessimism of the decision maker. In this method, the decision maker is allowed to have best and worst possible outcomes considered. In order to achieve this, Hurwicz suggests the use of coefficient of optimism. It is symbolized with ? and it is a decimal number between 0 and 1. If ? = 1, then the decision maker is hundred percent optimistic. If ? = 0, then the decision maker is hundred percent pessimistic. Since ? is the level of optimism we may easily call 1 – ? as the level of pessimism in the decision problem. Therefore, by changing the value of the ?, the decision maker may try to balance the optimism and pessimism.
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