Risky decision

Briefintroduction

Riskdecision-makingisalsocalled"randomdecision-making".Inthiskindofdecision-making,therearemultipleoutcomesofthedecision,andthedecisionmakerdoesnotknowwhichoutcomewilloccur,buttheprobabilityofeachoutcomeisknown.Asituationclosertorealityisrisk.Theso-calledrisk.Referstosituationswheredecisionmakerscanestimatetheprobabilityofacertainoutcomeorplan.Thisabilitytoestimatetheprobabilityofanoutcome.Itmaycomefrompersonalexperienceoranalysisofsecond-handdata.Inariskysituation,themanagerhashistoricaldatathatguideshimtoestimatetheprobabilitiesofdifferentoptions.

Conditions

Riskdecision-makinghasthefollowingfiveconditions:

(1)Thedecision-makerhasacleargoal(largergainsorlargerlosses)Small);

(2)Therearemorethantwoactionplansforthedecisionmakertochoose;

(3)Therearetwoormoreactionsthatarenotsubjecttothedecisionmaker’ssubjectivewillIsthenaturalstateoftransition;

(4)Theprofitandlossvalueofdifferentactionplansindifferentnaturalstatescanbecalculated;

(5)InseveraldifferentnaturalstatesInthefuture,thedecision-makerisnotsurewhichnaturalstatewillappearinthefuture,butthepossibilityofvariousnaturalstatescanbeestimatedorcalculatedbythedecision-maker.

Decision-makingmethods

Thefollowingintroducesseveraldecision-makingmethodsforrisk-baseddecision-making.

1.Themostprobablemethod

Themostprobablemethodisbasedonthemostprobablecriterion.Weknowthatthegreatertheprobabilityofanevent,thegreatertheprobabilityofitsoccurrence.Basedonthiskindofthinking,themostprobablecriterionistochooseanaturalstatewiththehighestprobabilityfordecision-makingintheriskdecision-makingproblem.Othernaturalstatescanbeignored.Atthistime,therisk-baseddecision-makingproblemcanbecomeadeterministicdecision-makingproblemandfollowthedeterministicdecision-making.Themodelmethodoftheproblemisdealtwith.

Generallyspeaking,itismoreappropriatetoadoptthemaximumpossiblemethod:theprobabilityofacertainnaturalstateismuchgreaterthanthatofothernaturalstates,andwheneachnaturalstateoccurs,thelossvalueisnotThereisahugedisparity.

2.Expectedvaluemethod

Theexpectedvaluemethodisbasedontheexpectedvaluecriterion.Theexpectedvaluecriterionistofindtheexpectedvalueofeachactionplan,compareit,andselecttheactionplanwiththebestexpectedvalue.Theexpectedvalueofeachactionplanis

3.Decisiontreemethod

Thetheoreticalbasisofthedecisiontreemethodisstilltheexpectedvaluecriterion,whichcanexpresstheresultsofdifferentdecision-makingschemesindifferentnaturalstatesandshowthedecision-makingprocess.Thedecisiontreemethodhasaclearcontentandclearthinking.Sincethedecision-makingprocessofthedecisiontreemethodislikeatreebranch,avisualnameiscalleddecisiontree.Comparedwiththedecisiontable,thedecisiontreeismoreflexibleindescribingandanalyzingdecision-makingproblems.