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SENSITIVITY ANALYSIS IN DECISION THEORY
Author(s) -
Evans James R.
Publication year - 1984
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1984.tb01211.x
Subject(s) - sensitivity (control systems) , optimal decision , parametric statistics , decision theory , computer science , decision analysis , linear programming , mathematical optimization , mathematics , decision tree , statistics , artificial intelligence , electronic engineering , engineering
This paper explores linear programming‐like sensitivity analysis in decision theory. In particular, the paper considers the sensitivity of an optimal decision to changes in probabilities of the states of nature and the development of “confidence spheres” to bound arbitrary parametric changes in the probability vector. Such information can be used to assess the accuracy required in assigning probabilities and the confidence in the maximumutility decision.