Special Topics in Statistics and Probability (STSP): Decision Theory

Decision making under conditions of uncertainty. Calculating the financial outcomes for every combination of an act and a possible event. Decision criteria (criteria based exclusively on the possible financial outcomes). A priori decision-making analysis (Hurwicz alpha index, the Bayes criterion, expected value of complete information. Graphical analysis of decision-making problems. Point and possibility of indifference. The normal distribution in a priori decision making. The Bayes criterion and sensitivity analysis). Decision making and the theory of money utility. Constructing the money utility curve. Expected utility value as a decision criterion. Posterior analysis of decision making (utilization of additional information to improve decisions, creating the tree diagram). Pre-posterior analysis of decision making. Bayesian decision making and classic statistical induction. Introduction to game theory (complete and incomplete information games, two player zero sum games).

Recommended Reading

• Ευάγγελος Μαγείρου, Παίγνια και Αποφάσεις, Εκδόσεις Κριτική, 2012.
• Κ. Μηλολιδάκης, Θεωρία Παιγνίων, Εκδόσεις Σοφία, 2009.
• J. Q. Smith, Decision Analysis: A Bayesian Approach, Chapman and Hall, 1988.
• F. S. Hillier and G. J. Lieberman: Introduction to Operations Research, Mc GrawHill, 2005.

The course outline can be found here.