Influence Diagram and Linked Decision Tree
Channel: Amir H. Ghaseminejad
Date: 2015-06-02

Amir H. Ghaseminejad explains how Influence Diagram and Linked Decision Tree can be used to help the decision makers in United Stars to make a decision about invading another planet.
The scenario is:
After a number of citizens of planet Sayodi attacked United Stars,  United Stars is considering to invade planet Urac!!. 
You are asked to provide systematic help to decision makers (preventing them from falling in the traps of emotional decision making).
 
You are not allowed to question the choice of invading Urac Planet instead of Sayodi Planet. And you are not concerned about the human costs of war. Predictions about things that may happen beyond 10 years from now, are simply speculations; therefore you should ignore them. You should focus on Expected Monetary Value (EMV) of decisions. 

United Stars have two choices: to invade Urac, or Not to Invade Urac.

If they choose not to invade, there will be no expected costs from Uracies, because they have been under sanctions for years. 
There is an expectation of mere ₡5 billion Rallods net income per year from trade with Urac in next 10 years.

If United Stars decide to invade Urac, there will be two possible events.
1) There is 10% chance that planet Urac will welcome occupation; in which case United Stars will make ₡50 billion per year from Oilitalium extracted from Urac in next 10 years with negligible costs.

2) There is 90% chance that people in planet Urac will not welcome the invasion and won't like to live in an occupied planet.

2-1) If  Urac will not like to live in an occupied planet, United Stars may decide to stay in Urac regardless,  or may decide to Not to stay.

2-1-1) If United Stars decide not to stay,  They will have a net loss of $100 Billion because of the cost of operations.
2-1-2)  If United Stars decide to stay, there is 50% chance that Uracies may fight back. And 50% chance that they will do nothing. 
If Uracies fight back it will cost US ₡3000 Billion in next 10 years. 
But if Uraqcies do nothing, US may earn half of Urac's income from Oilitalium. Their share will be ₡50 Billion per year during next 10 years with negligible costs.

Using Influence Diagram and Linked Decision Tree analyze and find the best decision for United Stars.

http://en.wikipedia.org/wiki/Expected_value_of_perfect_information