Dan Hein Owns the Mineral and Drilling Rights to a 1,000

Multiple Choice

Dan Hein owns the mineral and drilling rights to a 1,000 hectare tract of land.If he drills a well and does not strike oil his net loss will be $500,000, but if he drills a well and strikes oil his net gain will be $1,000,000.If he does not drill, his loss is the cost of the mineral and drilling rights, which amount to $10,000.The probability of the state of nature "oil in the tract" is unknown.If Dan is a pessimist, he would choose the ___.

A) maximin criterion
B) maximax criterion
C) Hurwicz criterion
D) minimax regret strategy
E) maximin regret strategy