Generalized evaluation in decision analysis
The paper presents a discussion on evaluation methods in decision analysis. The presentation begins with the discussion of the expected value rule for selection amongst a number of available courses of action. Then a number of other evaluation rules to either replace or supplement the expected value are presented. They are discussed from a choice rather than preference view. To improve the expected value rule (or any other similar rule), it is suggested that it should be supplemented with other, qualitative rules rather than engaging in further modifications in pursuit of the perfect rule. A characteristic of qualitative rules is that they do not rely on multiplying probabilities and values but treat them as separate numeric entities. Once a rule has been agreed upon, it can be applied to all the alternatives, provided there is a computational procedure for evaluating the alternatives under that rule. Delta dominance is introduced as a unifying concept for many of the dominance rules in current use. Dominance and threshold methods are discussed and the kinship between them is pointed out.
decision analysis decision theory uncertain reasoning stochastic dominance