Decision Models决策树模型.pptVIP

Decision Models;6.1 Introduction to Decision Analysis;Maximizing the decision maker’s utility function is the mechanism used when risk is factored into the decision making process.;6.2 Payoff Table Analysis;TOM BROWN INVESTMENT DECISION;The return on each investment depends on the (uncertain) market behavior during the year. Tom would build a payoff table to help make the investment decision;;The Payoff Table;The Payoff Table; The stock option alternative is dominated by the bond alternative;6.3 Decision Making Criteria;The decision criteria are based on the decision maker’s attitude toward life. The criteria include the Maximin Criterion - pessimistic or conservative approach. Minimax Regret Criterion - pessimistic or conservative approach. Maximax Criterion - optimistic or aggressive approach. Principle of Insufficient Reasoning – no information about the likelihood of the various states of nature.;Decision Making Under Uncertainty - The Maximin Criterion;This criterion is based on the worst-case scenario. It fits both a pessimistic and a conservative decisionmaker’s styles. A pessimistic decision maker believes that the worst possible result will always occur. A conservative decision maker wishes to ensure a guaranteed minimum possible payoff.;TOM BROWN - The Maximin Criterion;=MAX(H4:H7); To enable the spreadsheet to correctly identify the optimal maximin decision in cell B11, the labels for cells A4 through A7 are copied into cells I4 through I7 (note that column I in the spreadsheet is hidden). ;Decision Making Under Uncertainty - The Minimax Regret Criterion; The Minimax Regret Criterion This criterion fits both a pessimistic and a conservative decision maker approach. The payoff table is based on “lost opportunity,” or “regret.” The decision maker incurs regret by failing to choose the “best” decision.;The Minimax Regret Criterion To find an optimal decision, for each state of nature: Determine the best payoff over all decisions.