Basic terminology 16.422 Ordering of preferences Alternatives can be quantified and ordered A>B, A preferred to B a=B. A is equivalent to b a> B, B is not preferred to a Transitivity of preference ifA1>A2,&A2≥A3, then a1≥A3
Basic Terminology 16.422 • Ordering of preferences – Alternatives can be quantified and ordered – A > B, A preferred to B – A = B, A is equivalent to B – A ≥ B, B is not preferred to A • Transitivity of preference – i f A1 ≥ A 2, & A2 ≥ A 3, then A1 ≥ A 3
Decision trees 16.422 Decisions over time and or events 11 2 Decision 2 Chance A 22 Nodes
Decision Trees 16.422 • Decisions over time and/or events Decision Node S 1 S 2 C11 C12 C21 C22 A 2 A1 A1 Chance A 2 Nodes
Decision making Under certainty 16.422 Each alternative leads to one and only one consequence Consequences are known Lexicographic ordering Dominance Satisficing Maximin · Minimax
Decision Making Under Certainty 16.422 • Each alternative leads to one and only one consequence – Consequences are known • Lexicographic ordering • Dominance • Satisficing • Maximin • Minimax