Modeling and Decision Analysis
Abstract
The author uses mathematical modeling in decision analysis to help obtain a 'better' profit lottery than can be assessed directly. The concept of the authenticity of probabilities is introduced to define the measure of 'goodness' of the profit lottery. The role of modeling is to simplify the assessment task through the decomposition of the profit lottery. However, budgetary constraints force one to make approximations in the modeling process and thereby causes one to misstate the profit lottery. The models used in a decision analysis should be regarded as subjective expressions of uncertainty rather than as objective descriptions of the real-world. A methodology is presented that quantitatively relates the modeling approximations made in a decision analysis to the results of the analysis.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 30, 1975
- Accession Number
- ADA016276
Entities
People
- Steven Nobumasa Tani
Organizations
- Stanford University