Abstract
This chapter starts with an introduction to Decision Theory. Then, a varied set of Decision Theory problems is proposed with their corresponding solutions. This chapter aims to provide a better understanding of modelling decision problems by means of decision trees. Thus, low-risk decision problems are set out in which the decision maker can acquire further information to amend a priori probabilities by Bayes Theorem. The utility concept and its use instead of monetary values are also introduced, which are the most usual kind in Organisation Engineering problems.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Bayes T, Price R (1763) An Essay towards solving a Problem in the Doctrine of Chance. By the late Rev. Mr. Bayes, communicated by Mr. Price, in a letter to John Canton, M. A. and F. R. S. Philosophical Royal Society London 53(0):370–418
Bernoulli D (1954) Exposition of a new theory on the measurement of risk. Econometrica 22(1):23–36
Bernstein P (1996) Against the gods: the remarkable story of risk. Wiley, New York
Lehmann EL (1950) Some principles of the theory of testing hypotheses. Ann Math Stat 21(1):1–26
Pascal, B. (1671) Les Pensées, Guillaume Desprez, Paris
Raiffa H, Schlaifer R (1961) Applied statistical decision theory. MIT Press, Cambridge
Stigler GJ (1968) The development of utility theory, in utility theory: a book of readings. Wiley, New York
Wald A (1939) Contributions to the theory of statistical estimation and testing hypotheses. Ann Math Stat 10(4):299–326
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2014 Springer-Verlag London
About this chapter
Cite this chapter
Poler, R., Mula, J., Díaz-Madroñero, M. (2014). Decision Theory. In: Operations Research Problems. Springer, London. https://doi.org/10.1007/978-1-4471-5577-5_7
Download citation
DOI: https://doi.org/10.1007/978-1-4471-5577-5_7
Published:
Publisher Name: Springer, London
Print ISBN: 978-1-4471-5576-8
Online ISBN: 978-1-4471-5577-5
eBook Packages: EngineeringEngineering (R0)