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4 Examples of Maximax Criterion

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The maximax criterion is the option in a set of choices that maximizes potential gain irrespective of risk. As the maximax choice doesn't consider risk at all it isn't usually an optimal choice. However, it is a reasonable common choice due to a number of factors:


If you believe that fortune favors the bold, the maximax choice may be attractive. The maximax criterion is associated with optimism as a strategy or as a personality trait. For example, a young entrepreneur may adopt maximax choices such as the decision to compete directly with a large firm as opposed to choosing a smaller niche that is easier to win. This may lead to quick cycles of failure and learning that allow the entrepreneur to eventually find a way to their goals.

Nothing To Lose

Risks don't mean as much when you don't have much to lose. For example, a firm with no customers has less to risk from a bold marketing strategy than a firm with 90% of the market that doesn't want to lose existing customers.

Perverse Incentives

Maximax choices occur when a person is rewarded for success but incurs no cost for failure. For example, a stock trader who is betting other peoples money with large rewards if they return 10% or more but few consequences if they lose money.


In some cases, the maximax criterion happens to be the optimal choice. For example, a hockey team with 2 minutes on the clock that is two goals down may take extraordinary risks such as pulling their goalie if they need to tie the game to survive into the playoffs.
Overview: Maximax Criterion
The choice in a set of options with the greatest potential gain irrespective of risk.
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Decision Making

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Abilene Paradox
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Analytic Reasoning
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Boil The Frog
Choice Architecture
Cold Logic
Collective Intelligence
Convergent Thinking
Critical Thinking
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Decision Mapping
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Decision Support
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Devil's Advocate
Disagree And Commit
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Failure Of Imagination
Group Decisions
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Maximax Criterion
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Motivated Reasoning
Non Decision
Normative Model
Opportunity Cost
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Sanity Check
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A list of decision making techniques.

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The observation that groups may make collective decisions that are viewed as wrong or irrational by each individual member of the group.

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The difference between rational thought and logic.


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Reverse Brainstorming

A definition of reverse brainstorming with examples.

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Devils Advocate

Taking a position that you do not necessarily agree with for the purposes of argument.

Paradox Of Choice

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Sanity Check

An overview of sanity checks, a decision making and problem solving technique.

Preserving Ambiguity

Overview of preserving ambiguity.

Strategic Dominance

Strategic dominance is your best choice in a given situation.


The definition of indecision with examples.

Group Decisions

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Decision Examples

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