In using the criterion of realism Hurwicz criterion the coef

In using the criterion of realism (Hurwicz criterion), the coefficient of realism ()

1.Is the probability of a good state of nature.

2. Describes the degree of optimism of the decision maker.

3. Describes the degree of pessimism of the decision maker.

4. Is usually less than zero.

Solution

coefficient of realism describes the degree of optimism or pessimism of the decision maker.

coefficient of realism always lies between 0 to 1

alpha = 1 means pure optimist

alpha = 0 means pure pessimist.

So correct option will be option 2 and 3