An Introduction to Decision Trees
When facing a complex decision, the structure of the problem is oftentimes not obvious. A decision diagram can help the decision-maker understand the nature of the problem he or she is facing and evaluate the impact of risk on the final decision. It also allows us to carry out a sensitivity analysis, which investigates how sensitive our initial decision is to small changes in the relevant parameters.
Collection: IESE (España)
Ref: ADN-278-E
Format: PDF
Number of pages: 16
Publication Date: Jul 26, 2013
Description
When facing a complex decision, the structure of the problem is oftentimes not obvious. A decision diagram can help the decision-maker understand the nature of the problem he or she is facing and evaluate the impact of risk on the final decision. It also allows us to carry out a sensitivity analysis, which investigates how sensitive our initial decision is to small changes in the relevant parameters.
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Learning Objective
This technical note explains how to understand and use decision diagrams (decision trees) as a decision-making tool.
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