The minimax criterion is the choice from a set of options that minimizes the risk of a worse-case scenario. This is often not an optimal choice as minimization of a risk can be extremely expensive and result in missed opportunities. Also, by focusing on the worse-case, less severe risks may be neglected even if they are far more likely to occur. The following are illustrative examples of minimax criterion.
SafetyA traveler wants to minimize the risk of being involved in an air crash. They often take vacations close to home to avoid flying, missing opportunities to see more of the world. In some cases, the driving involved in their local trips is more of a safety risk than an international flight.
CareerAn employee seeks to minimize the risk of being fired. For example, they avoid taking on responsibilities and work that might lead to failure. This results in mediocre performance that may decrease the chance of rewards, promotions, respect and job satisfaction.
InvestingAn investor seeks to minimize loss of capital at any cost. For example, an investor who puts all their money into government guaranteed investments that can't decline in cash value such as certain insured savings accounts. This may neglect highly probable risks such as the loss of value of capital due to inflation.
This is the complete list of articles we have written about decision making.
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The definition of non-decision with examples.
Examples of decisions made with different decision making approaches.
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A list of risk examples by type.
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