IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v16y1968i2p254-267.html
   My bibliography  Save this article

Sensitivity of Decisions to Probability Estimation Errors: A Reexamination

Author

Listed:
  • Peter C. Fishburn

    (Advanced Research Department, Research Analysis Corporation)

  • Allan H. Murphy

    (Department of Meteorology and Oceanography, University of Michigan)

  • Herbert H. Isaacs

    (Herbert H. Isaacs, Research and Consulting, Inc.)

Abstract

In the subjective expected utility model for decision making under uncertainty the decision maker often has difficulty assigning to the states probabilities with which he is completely satisfied. Six approaches that might be used to help the decision maker resolve his uncertainty about the values of his state probabilities are outlined. One approach tells the decision maker how much he must perturb his initial probability estimate in order to change his maximum expected utility alternative from the alternative originally best under the initial estimate. This approach is examined in greater detail and an iterative algorithm for solving the minimum-perturbation problem is presented.

Suggested Citation

  • Peter C. Fishburn & Allan H. Murphy & Herbert H. Isaacs, 1968. "Sensitivity of Decisions to Probability Estimation Errors: A Reexamination," Operations Research, INFORMS, vol. 16(2), pages 254-267, April.
    • Handle: RePEc:inm:oropre:v:16:y:1968:i:2:p:254-267
    DOI: 10.1287/opre.16.2.254
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/opre.16.2.254
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.16.2.254?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ringuest, Jeffrey L., 1997. "LP-metric sensitivity analysis for single and multi-attribute decision analysis," European Journal of Operational Research, Elsevier, vol. 98(3), pages 563-570, May.
    2. James C. Felli & Gordon B. Hazen, 1998. "Sensitivity Analysis and the Expected Value of Perfect Information," Medical Decision Making, , vol. 18(1), pages 95-109, January.
    3. Tao Huang & J. Eric Bickel, 2019. "Sparse Probability Assessment Heuristic Based on Orthogonal Matching Pursuit," Decision Analysis, INFORMS, vol. 16(4), pages 281-300, December.
    4. Stanca Lorenzo, 2023. "Robust Bayesian Choice," Working papers 079, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    5. Lorenzo Stanca, 2023. "Robust Bayesian Choice," Carlo Alberto Notebooks 690 JEL Classification: C, Collegio Carlo Alberto.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:16:y:1968:i:2:p:254-267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.