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Decision Theory

Keywords: decision tree

Categories: Game Theory , Inference and Reasoning , Problem Solving


Author(s): Helen Lowe

Decision theory provides a basis for making choices in the face of uncertainty, based on the assignment of probabilities and payoffs to all possible outcomes of each decision. The space of possible actions and states of the world is represented by a decision tree, whose nodes may be either:

The decision tree is evaluated by calculating the expectation of the utility at each chance node and applying the maximisation operator at each decision node. The decision tree can be generated automatically from more economical representations of the decision environment such as influence diagrams or Bayesian Networks. Other methods for dealing with uncertainty are Bayesian Inference, Dempster-Shafer Theory and Certainty Factors.


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