Payoff Table

The payoff table is a device that a decision maker can use to summarize and organize information relevant to his decision. It is helpful in choosing among alternatives because it facilitates their comparison. The general format of a payoff table for m alternatives and n states of nature is shown in the following table.

States of Nature

 

 

S1

S2

Sn

 

A1

v11

v12

v1n

Alternatives

A2

v21

v22

v2n

 

 

 

 

 

Am

vm1

vm2

vmn

Ai = the i-th alternative for i = 1,2,,m

Sj = the j-th state of nature for j = 1,2,,n

vij = the value of payoff that will be realized if alternative Ai is chosen and event Sj occurs