Decision analysis typically deals with three components: 1) decision alternatives, 2) state of nature (about uncertain future) and 3) outcome.
Depending on our understanding of the uncertain future, we deal with three types of criterions: 1) ignorance, 2) risk, and 3) certainty. The main focus of our class is on decision making under RISK, which dictates that decision maker knows both the probability of each states of nature.
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