Maximin Strategy

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The Maximin or Wald strategy is a decision-making model that seeks, considering the worst scenario, the alternative that can provide better results.

That is, the Maximin strategy is characterized by following a pessimistic criterion, where the less favorable future for the agent (for example, a company) will be configured.

This type of strategy is one of the options when a decision must be made in a circumstance of uncertainty. That is, it is not certain what will be, for example, the result of an advertising campaign or of contracting with a specific public relations agency.

The Maximin strategy is also one of those non-competitive decisions. That is, there is no counterpart who is going to respond. The latter would be the case of competitive decisions, where there is an opponent, and that is what game theory studies.

Another point to keep in mind is that this strategy will not necessarily always be optimal. This will depend on the most pessimistic scenario.

The opposite of the Maximin strategy would be the Maximax strategy, where the best option is chosen, in the best scenario.

Maximin strategy example

Suppose that a company has the alternative of investing in three business events, each of which has different characteristics and the results that we see in the following table:

Scenario 1Scenario 2Scenario 3
Event A201816
Event B512515
Event C302314

As is clear from the table, scenario 3 is the most pessimistic, overall, because it records the lowest results for all three events.

Then, following the Maximin strategy, the event that, in that scenario, has the best result will be chosen. That is, the event A.

As we can see, if the most optimistic scenario were given, this choice would not be the optimal one, since more would be gained in event B. However, in this case, the decision maker is assuming that the most negative situation is going to happen.

To put it in contrast, if we followed the criteria of the Maximax strategy, we would choose event B, since it is where you win the most, in the best scenario.

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