Many of us do not like to get into a situation where information on external factors is very small, or it is completely absent, and thus an urgent need to make important choices.Most likely, that's why most people prefer to avoid liability on the job and is content with the modest, but at the same time a relatively quiet office.If they knew about game theory and of what use can render the criteria Wald, Savage, Hurwitz, career most savvy of them would probably have gone up rapidly.
expect the worst
It can be described as the first of these principles.Wald test is often also called the criterion of extreme pessimism or minimum rule of evil.With limited resources and a precarious, unstable position seems logical reinsurance position, which is designed for the worst case.Maximin Wald test focuses on maximizing win under the most adverse circumstances.An example of its use can serve a maximum increase in the minimum income maximization of the minimum amount of cash, and so on. N. This strategy is justified in cases where the person taking the decision is not so much interested in a big success, as he wants to insure themselves against unexpected losses.In other words, the Wald test reduces the risk to a minimum and allows you to make the most efficient solutions.Such an approach makes it possible to receive a guaranteed minimum, although the actual outcome may not be so bad.
Wald test: example of
Suppose some company is going to produce new types of products.Thus it is necessary to make a choice between one of the four options B1, B2, B3, B4, each of which requires a specific type of release or a combination thereof.From the decision will ultimately depend on what the company will make a profit.Exactly how the market conditions in the future is unknown, but analysts predict three basic scenarios: C1, C2, C3.These data create a table of winning options that correspond to each pair of possible solutions and the likely situation.
| Other products | Scripts market conditions | worst result | ||
| C1 | C2 | C3 | ||
| B1 |
25 | 37 | 45 | 25 |
| B2 | 50 | 22 | 35 | 22 |
| B3 | 41 | 90 | 15 | 15 |
| B4 | 80 | 32 | 20 | 20 |
using the Wald test, choose the best strategy, one that will be considered for optimal enterprise.In our case, the performance indicator
E = max {25; 22; 15; 20} = 25.
Him we have received by each of the options and the minimum result of having isolated among them one that will bring the highest return.This means that the decision will be for the company B1, according to this criterion, the best.Even under the most adverse conditions will obtain a result of 25 (C1) at the same time it is possible that it will reach 45 (C3).Note again that the Wald test focuses on human utmost care strategy.Under other circumstances, it is possible to be guided by other considerations.For example, version B3 could bring gains of 90 with guaranteed result 15. However, this case goes beyond the scope of this article, and therefore treat it we will not.
