🔄Decision theory

The sub-topic Decision Theory includes materials and calculation tools for two methods: the decision matrix and the decision tree. Both methods are used for decision-making, including situations involving uncertainty.

The Documents & Materials section contains a mathematical description of the calculation tool and sets of exercises (two exercises for each of three difficulty levels).

Specifically, the following elements are covered:

Decision Matrix

-Basic concepts and definitions

-Decision rules:

1. Maximax rule (optimistic)

2. Maximin rule (Wald criterion, pessimistic)

3. Laplace rule (principle of insufficient reason)

4. Hurwicz rule (optimism index)

5. Savage-Niehans rule (minimax regret)

6. Expected value rule (Bayes criterion)

Decision Tree

-Decision nodes, chance nodes, outcome nodes

-Rollback method (backward induction)

-Visualization

-Tree structure