A payoff matrix features strategies S1, S2, S3, and S4 and competitive strategies CA1, CA2, and CA3. In a short essay, explain how maximum regret can be calculated for an S1 strategy
What will be an ideal response?
Answer: For the S1 strategy, values for CA1, CA2, and CA3 must be compared to the CA1, CA2, and CA3 values for S2, S3, and S4. To compute regret, find the difference between the S1 value in a column and the greatest value in that same column. Find the regret value for each column, then compare the three regret values for CA1, CA2, and CA3. The greatest value identifies the maximum regret.
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