Decision Theory Calculator

Evaluate with maximax, maximin, Laplace, and minimax regret. Compare probabilities, payoffs, and sensitivity visually clearly. Make confident choices from structured decision tables and charts.

Decision Theory Calculator Form

Number of Alternatives

Number of States

Table Type

State 1 Name

State 2 Name

State 3 Name

Probability for State 1

Probability for State 2

Probability for State 3

Hurwicz Alpha (0 to 1)

Alternative	State 1	State 2	State 3

Results appear above this form after submission.

Example Data Table

Alternative	High Demand	Medium Demand	Low Demand
Large Plant	120	80	20
Medium Plant	90	70	40
Small Plant	50	60	55

Example probabilities can be 0.30, 0.45, and 0.25. This gives a realistic starting point for testing different decision rules.

Formula Used

Expected Monetary Value:
EMV = Σ(P(state) × Payoff)

Maximax Rule:
Choose the largest best-case payoff.

Maximin Rule:
Choose the largest worst-case payoff.

Laplace Criterion:
Average Payoff = (Sum of row payoffs) ÷ Number of states

Hurwicz Criterion:
Profit table: α × Best payoff + (1 − α) × Worst payoff
Loss table: α × Best cost + (1 − α) × Worst cost

Regret:
Profit regret = Best state payoff − chosen payoff
Loss regret = chosen cost − best state cost

Minimax Regret:
Choose the alternative with the smallest maximum regret.

Expected Value of Perfect Information:
EVPI = EV with perfect information − best EMV

How to Use This Calculator

Choose how many alternatives and states you want to evaluate.
Enter a name for every state and alternative.
Add state probabilities. They will normalize automatically if needed.
Enter payoffs for profit tables or costs for loss tables.
Set Hurwicz alpha to reflect your optimism level.
Submit the form to generate all major decision criteria.
Compare EMV, Laplace, regret, and optimism-based recommendations.
Download the output as CSV or PDF for reporting.

FAQs

1. What does this decision theory calculator do?

It compares alternatives under uncertainty using several standard decision rules. You can study expected value, regret, optimistic choices, pessimistic choices, and average outcomes in one place.

2. When should I use a profit table?

Use a profit table when higher numbers are better outcomes. Typical examples include revenue, contribution margin, utility, score, or expected benefit.

3. When should I use a loss table?

Use a loss table when smaller numbers are preferred. This is common for project cost, delay, shortage, defect impact, or risk exposure values.

4. What is EMV in decision theory?

EMV means Expected Monetary Value. It multiplies each outcome by its probability, then sums the products. It is useful when probabilities are available and credible.

5. What is minimax regret?

Minimax regret chooses the alternative that limits the largest possible regret. It helps when decision makers want to avoid feeling they missed the best outcome badly.

6. Why is Hurwicz alpha important?

Hurwicz alpha controls how optimistic the decision maker is. A higher alpha emphasizes the best outcome more strongly, while a lower alpha gives more weight to the worst outcome.

7. What happens if probabilities do not sum to one?

The calculator normalizes them automatically. This preserves their relative proportions and lets you continue the analysis without manually fixing the total first.

8. What is EVPI used for?

EVPI estimates the maximum value of having perfect information before making the choice. It helps judge whether extra research or forecasting is worth paying for.