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Decision Rule
In decision theory, a decision rule is a function which maps an observation to an appropriate action. Decision rules play an important role in the theory of statistics and economics, and are closely related to the concept of a strategy (game theory), strategy in game theory. In order to evaluate the usefulness of a decision rule, it is necessary to have a loss function detailing the outcome of each action under different states. Formal definition Given an observable random variable ''X'' over the probability space \scriptstyle (\mathcal,\Sigma, P_\theta), determined by a parameter ''θ'' ∈ ''Θ'', and a set ''A'' of possible actions, a (deterministic) decision rule is a function ''δ'' : \scriptstyle\mathcal→ ''A''. Examples of decision rules * An estimator is a decision rule used for estimating a parameter. In this case the set of actions is the parameter space, and a loss function details the cost of the discrepancy between the true value of the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Decision Theory
Decision theory (or the theory of choice; not to be confused with choice theory) is a branch of applied probability theory concerned with the theory of making decisions based on assigning probabilities to various factors and assigning numerical consequences to the outcome. There are three branches of decision theory: # Normative decision theory: Concerned with the identification of optimal decisions, where optimality is often determined by considering an ideal decision-maker who is able to calculate with perfect accuracy and is in some sense fully rational. # Prescriptive decision theory: Concerned with describing observed behaviors through the use of conceptual models, under the assumption that those making the decisions are behaving under some consistent rules. # Descriptive decision theory: Analyzes how individuals actually make the decisions that they do. Decision theory is closely related to the field of game theory and is an interdisciplinary topic, studied by econom ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Statistics
Statistics (from German language, German: ''wikt:Statistik#German, Statistik'', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a scientific, industrial, or social problem, it is conventional to begin with a statistical population or a statistical model to be studied. Populations can be diverse groups of people or objects such as "all people living in a country" or "every atom composing a crystal". Statistics deals with every aspect of data, including the planning of data collection in terms of the design of statistical survey, surveys and experimental design, experiments.Dodge, Y. (2006) ''The Oxford Dictionary of Statistical Terms'', Oxford University Press. When census data cannot be collected, statisticians collect data by developing specific experiment designs and survey sample (statistics), samples. Representative sampling as ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics include those between positive economics, desc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Strategy (game Theory)
In game theory, a player's strategy is any of the options which they choose in a setting where the outcome depends ''not only'' on their own actions ''but'' on the actions of others. The discipline mainly concerns the action of a player in a game affecting the behavior or actions of other players. Some examples of "games" include chess, bridge, poker, monopoly, diplomacy or battleship. A player's strategy will determine the action which the player will take at any stage of the game. In studying game theory, economists enlist a more rational lens in analyzing decisions rather than the psychological or sociological perspectives taken when analyzing relationships between decisions of two or more parties in different disciplines. The strategy concept is sometimes (wrongly) confused with that of a move. A move is an action taken by a player at some point during the play of a game (e.g., in chess, moving white's Bishop a2 to b3). A strategy on the other hand is a complete algorithm for p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Game Theory
Game theory is the study of mathematical models of strategic interactions among rational agents. Myerson, Roger B. (1991). ''Game Theory: Analysis of Conflict,'' Harvard University Press, p.&nbs1 Chapter-preview links, ppvii–xi It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed two-person zero-sum games, in which each participant's gains or losses are exactly balanced by those of other participants. In the 21st century, game theory applies to a wide range of behavioral relations; it is now an umbrella term for the science of logical decision making in humans, animals, as well as computers. Modern game theory began with the idea of mixed-strategy equilibria in two-person zero-sum game and its proof by John von Neumann. Von Neumann's original proof used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, which became a standard method in game theory and mathema ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Loss Function
In mathematical optimization and decision theory, a loss function or cost function (sometimes also called an error function) is a function that maps an event or values of one or more variables onto a real number intuitively representing some "cost" associated with the event. An optimization problem seeks to minimize a loss function. An objective function is either a loss function or its opposite (in specific domains, variously called a reward function, a profit function, a utility function, a fitness function, etc.), in which case it is to be maximized. The loss function could include terms from several levels of the hierarchy. In statistics, typically a loss function is used for parameter estimation, and the event in question is some function of the difference between estimated and true values for an instance of data. The concept, as old as Laplace, was reintroduced in statistics by Abraham Wald in the middle of the 20th century. In the context of economics, for example, this i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Probability Space
In probability theory, a probability space or a probability triple (\Omega, \mathcal, P) is a mathematical construct that provides a formal model of a random process or "experiment". For example, one can define a probability space which models the throwing of a die. A probability space consists of three elements:Stroock, D. W. (1999). Probability theory: an analytic view. Cambridge University Press. # A sample space, \Omega, which is the set of all possible outcomes. # An event space, which is a set of events \mathcal, an event being a set of outcomes in the sample space. # A probability function, which assigns each event in the event space a probability, which is a number between 0 and 1. In order to provide a sensible model of probability, these elements must satisfy a number of axioms, detailed in this article. In the example of the throw of a standard die, we would take the sample space to be \. For the event space, we could simply use the set of all subsets of the sample ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Estimator
In statistics, an estimator is a rule for calculating an estimate of a given quantity based on observed data: thus the rule (the estimator), the quantity of interest (the estimand) and its result (the estimate) are distinguished. For example, the sample mean is a commonly used estimator of the population mean. There are point and interval estimators. The point estimators yield single-valued results. This is in contrast to an interval estimator, where the result would be a range of plausible values. "Single value" does not necessarily mean "single number", but includes vector valued or function valued estimators. ''Estimation theory'' is concerned with the properties of estimators; that is, with defining properties that can be used to compare different estimators (different rules for creating estimates) for the same quantity, based on the same data. Such properties can be used to determine the best rules to use under given circumstances. However, in robust statistics, statistica ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Prediction
A prediction (Latin ''præ-'', "before," and ''dicere'', "to say"), or forecast, is a statement about a future event or data. They are often, but not always, based upon experience or knowledge. There is no universal agreement about the exact difference from "estimation"; different authors and disciplines ascribe different connotations. Future events are necessarily uncertain, so guaranteed accurate information about the future is impossible. Prediction can be useful to assist in making plans about possible developments. Opinion In a non-statistical sense, the term "prediction" is often used to refer to an informed guess or opinion. A prediction of this kind might be informed by a predicting person's abductive reasoning, inductive reasoning, deductive reasoning, and experience; and may be useful—if the predicting person is a knowledgeable person in the field. The Delphi method is a technique for eliciting such expert-judgement-based predictions in a controlled way. Th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Regression Analysis
In statistical modeling, regression analysis is a set of statistical processes for estimating the relationships between a dependent variable (often called the 'outcome' or 'response' variable, or a 'label' in machine learning parlance) and one or more independent variables (often called 'predictors', 'covariates', 'explanatory variables' or 'features'). The most common form of regression analysis is linear regression, in which one finds the line (or a more complex linear combination) that most closely fits the data according to a specific mathematical criterion. For example, the method of ordinary least squares computes the unique line (or hyperplane) that minimizes the sum of squared differences between the true data and that line (or hyperplane). For specific mathematical reasons (see linear regression), this allows the researcher to estimate the conditional expectation (or population average value) of the dependent variable when the independent variables take on a given ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Statistical Classification
In statistics, classification is the problem of identifying which of a set of categories (sub-populations) an observation (or observations) belongs to. Examples are assigning a given email to the "spam" or "non-spam" class, and assigning a diagnosis to a given patient based on observed characteristics of the patient (sex, blood pressure, presence or absence of certain symptoms, etc.). Often, the individual observations are analyzed into a set of quantifiable properties, known variously as explanatory variables or ''features''. These properties may variously be categorical (e.g. "A", "B", "AB" or "O", for blood type), ordinal (e.g. "large", "medium" or "small"), integer-valued (e.g. the number of occurrences of a particular word in an email) or real-valued (e.g. a measurement of blood pressure). Other classifiers work by comparing observations to previous observations by means of a similarity or distance function. An algorithm that implements classification, especially in a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Admissible Decision Rule
In statistical decision theory, an admissible decision rule is a rule for making a decision such that there is no other rule that is always "better" than it (or at least sometimes better and never worse), in the precise sense of "better" defined below. This concept is analogous to Pareto efficiency. Definition Define sets \Theta\,, \mathcal and \mathcal, where \Theta\, are the states of nature, \mathcal the possible observations, and \mathcal the actions that may be taken. An observation x \in \mathcal\,\! is distributed as F(x\mid\theta)\,\! and therefore provides evidence about the state of nature \theta\in\Theta\,\!. A decision rule is a function \delta:\rightarrow , where upon observing x\in \mathcal, we choose to take action \delta(x)\in \mathcal\,\!. Also define a loss function L: \Theta \times \mathcal \rightarrow \mathbb, which specifies the loss we would incur by taking action a \in \mathcal when the true state of nature is \theta \in \Theta. Usually we will take thi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
