POL-UA 700 Lecture Notes - Lecture 3: Decision Tree Learning
21 Nov 2016
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Review of expected utility calculations - single decision maker. If p = 0. 8, the actor will choose to invade. If p = 0. 3, the actor will choose to not invade. What p will make the actor indifferent between invading and not invading? p = 23/30 ~= . 76. Actor 1 acts first, and has two options: c or d. Actor 2 observes the action of actor 1, then chooses between two options: a or b. The results of the tree are a set of payoffs: payoff (actor 1), payoff (actor 2). Backwards induction: going from right to left (bottom to top) to solve optimization problems (determine the preferred action for each actor). Determine what 2 will do given 1 choosing c. Determine what 2 will do given 1 choosing d. Determine eu for 1 of each action, and what 1 will select. Then write what 1 will choose and what 2 will choose.
