Normal form backward induction for decision trees with coherent lower previsions

DOI10.1007/S10479-011-0968-2MaRDI QIDQ1761870zbMATH OpenOpenAlexFDO

Authors Nathan Huntley, Matthias C. M. Troffaes

Publication date 15 November 2012

Published in Annals of Operations Research (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1104.0191, http://dro.dur.ac.uk/9365/1/9365.pdf

Mathematics Subject Classification ID

Decision theory (91B06)

Abstract: We examine normal form solutions of decision trees under typical choice functions induced by lower previsions. For large trees, finding such solutions is hard as very many strategies must be considered. In an earlier paper, we extended backward induction to arbitrary choice functions, yielding far more efficient solutions, and we identified simple necessary and sufficient conditions for this to work. In this paper, we show that backward induction works for maximality and E-admissibility, but not for interval dominance and Gamma-maximin. We also show that, in some situations, a computationally cheap approximation of a choice function can be used, even if the approximation violates the conditions for backward induction; for instance, interval dominance with backward induction will yield at least all maximal normal form solutions.

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Cited in

(10)

• Centroids of the core of exact capacities: a comparative study
• Modelling epistemic irrelevance with choice functions
• Reducing interval-valued decision trees to conventional ones: comments on decision trees with single and multiple interval-valued objectives
• A framework for sensitivity analysis of decision trees
• Decision making under severe uncertainty on a budget
• Boundedly rational backward induction
• Variable elimination for interval-valued influence diagrams
• Evaluating interval-valued influence diagrams
• Possibilistic sequential decision making
• Decision with belief functions and generalized independence: two impossibility theorems

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