Decision Analysis

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Decision Trees

  • The expected moentary value (EMV) is the average gain a person can expect to receive in the long run
  • Decision nodes are represented by a rectangle
  • Chance nodes are represented by a circle
  • The end node is represented by a triangle
  • Calulate the EMV by multiplying the possible profit by its probability and add all the respective multiplications up
  • To decide the value of the decision…

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