maximin

Maximin is a decision-making strategy that involves maximizing the minimum gain or outcome in a set of possible options. It is commonly used in game theory, economics, and management, particularly when decision-makers face uncertainty or risk and seek to adopt a cautious or conservative approach.

The core principle of maximin is to identify the worst-case scenario for each alternative and then choose the option with the best among those worst outcomes. This approach ensures a decision-maker is protected against the most adverse possible results, favoring stability and security over potential high gains that come with increased risk.

In game theory, the maximin strategy often applies to competitive situations where players aim to minimize potential losses rather than maximize gains, especially under incomplete information. It aligns with the concept of a "worst-case scenario analysis" and promotes risk-averse behavior, making it suitable in environments with high uncertainty or where failure carries significant consequences.

The concept was formalized by John von Neumann and Oskar Morgenstern in their foundational work on game theory. The maximin principle is contrasted with the maximax strategy, which seeks the maximum possible gain, reflecting more risk-tolerant behavior.

While the maximin approach provides safety, it can lead to overly conservative decisions that forgo higher potential rewards. Its application is most appropriate in contexts where avoiding the worst outcome is prioritized, such as security planning, resource allocation during crises, or strategic defense.

Overall, maximin serves as a vital decision rule within rational choice theory, emphasizing prudence and risk management in strategic decision-making processes.