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Duration : 30 minutes
Note that opportunity losses are defined as nonnegative numbers. The best possible OL is zero (no regret) and the higher the OL value, the greater the regret. Lets try to present the calculations of Savage MiniMax regret criterion using the example with the companys supplies from Lesson 1: 1. First we have to calculate the Opportunity Loss table using the formula (1) and the payoff matrix Table 2 from Lesson 1: Opportunity Loss Table 4 1 2 25 23 21 15 a1 a2 0 3 3 0 11 15
Payoffs Table 2 1 a1 a2 a3 a4 5 8 21 30 10 7 18 22
3 18 8 12 19
3 10 0 4 11
4 10 8 6 0
a3 16 a4 25
Bayesian Networks 2. We have to calculate the maximum opportunity loss for each alternative: 1 a1 a2 0 3 2 3 0 11 15 3 10 0 4 11 4 10 8 6 0 max 10 8 16 25
a3 16 a4 25 3.
At the end we choose the alternative with the minimum maximum loss. Thus a2.
Now the Principle of Insufficient Reason states that if no probabilities have been assigned by the decision maker, then it follows there was insufficient reason for decision maker to indicate that any one state j was more or less likely to occur than any other state. Consequently, all the states j must be equally likely. Therefore, the probability pj for every j must be 1/n, where n is the number of states of nature in .
If the value v(ai,j) represents positive payoff (profit) then alternative amax is selected as the best:
amax=argaimax{
v(ai,j)}
(1)
if the value v(ai,j) represents negative payoff (cost) then alternative amin is selected as the best:
amin=argaimin{
v(ai,j)}
(2)
If we try to apply the calculations of Laplace criterion on the example from Lesson 1 using formula 2, we get the following results:
1 a1 a2 a3 a4 5 8 21 30
2 10 7 18 22
3 18 8 12 19
4 25 23 21 15
Paraskevopoulos Konstantinos
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