Discussion Question

Topics: Decision theory, Decision analysis, Decision tree Pages: 3 (607 words) Published: October 13, 2013

"The Process of Analysis ̶ Diagrams and Trees"

Decision analysis offers organization and direction for thinking methodically about challenging alternatives. Complexity, uncertainty, multiple intentions and numerous perspectives can lead to different best guesses. The policy analyst has several tools she or he can use to make hard decisions easier to make. Two of these tools are decision trees and influence diagrams. As the author notes, these problem-structuring methods are valuable in producing information about the problem to solve. Diagrams and trees are designed to assist the policy analyst in making sound judgment calls (Dunn 2011, p.8).

Influence Diagrams

An influence diagram provides a straightforward graphical representation of a decision problem. The elements of the problem are represented by graphical symbols that include shapes (nodes) and arrows (arcs). Nodes include: Square=decisions, Circles=chance events, Rectangles with rounded corners=values. Arrows/arcs are used to connect the nodes. A node at the beginning of an arc is called a predecessor. A node at the end of an arc is called a successor. To show the relationship among the elements these shapes are linked with arrows in a specific pattern.

Decision Trees

The shapes and circles have the same representation as they do in the influence diagram. The branches of the decision tree stemming from a square (decisions to make) communicate to the actions available. Branches from a circle (chance events) correspond to the potential outcomes. At the end of the branch(s) is the payoff.

From case study 1.3, compare and contrast the benefits of influence diagram and decision tree in Figure C1.3.

The decision tree is another way of displaying an influence diagram. The diagram exhibited in case 1.3 shows how policy choices and speculative events affect the reaching of goals. On the other hand, the tree displays the monetary value of these targets. (Dunn 2011). In reviewing...
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