Probabilistic Risk Analysis and Bayesian Decision Theory by Marcel van Oijen & Mark Brewer

Author:Marcel van Oijen & Mark Brewer
Language: eng
Format: epub
ISBN: 9783031163333
Publisher: Springer International Publishing

(12.1)

The analysis of this decision problem with uncertainty is shown in the middle panel of Fig. 12.3. We see that the optimum action is now 1.1, which is larger than it was without uncertainty. And if we increase the uncertainty by a factor 1.5, then the optimum action increases even further (right panel of Fig. 12.3). Reducing the uncertainty by the same factor reduces the optimum to 0.8 as shown in the left panel.

Fig. 12.3Utility as a function of action a for a negative exponential performance function and linear cost and benefit functions. Solid line: expectation. Dashed lines: Q25 and Q75. Middle panel: uncertainty levels (standard deviations) as indicated in the text. Left panel: uncertainties divided by 1.5. Right panel: uncertainties multiplied by 1.5

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.