This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza. If Sam chooses S3, how is he feeling about the business climate?
CA1 CA2 CA3
S1 13 14 7
S2 7 17 12
S3 31 29 4
S4 20 12 21
A) Sam is feeling pessimistic because he has chosen a maximax strategy.
B) Sam is feeling pessimistic because he has chosen a minimax strategy.
C) Sam is feeling optimistic because he has chosen a maximax strategy.
D) Sam is feeling optimistic because he has chosen a maximin strategy.
Answer: C
Explanation: Sam has chosen the strategy with greatest maximum, 31, indicating that he is expecting good times ahead, so he wants to get the greatest possible low result rather than the greatest possible high result. This reflects an optimistic outlook on the future.
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