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Preference Factoring for Stochastic Trees

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  • Gordon Hazen

    (Department of Industrial Engineering and Management Sciences, Northwestern University, Technological Institute, Evanston, Illinois 60208-3119)

Abstract

Stochastic trees are extensions of decision trees that facilitate the modeling of temporal uncertainties. Their primary application has been to medical treatment decisions. It is often convenient to present stochastic trees in factored form, allowing loosely coupled pieces of the model to be formulated and presented separately. In this paper, we show how the notion of factoring can be extended as well to preference components of the stochastic model. We examine updateable-state utility, a flexible class of expected utility models that permit stochastic trees to be rolled back much in the manner of decision trees. We show that preference summaries for updateable-state utility can be factored out of the stochastic tree. In addition, we examine utility decompositions which can arise when factors in a stochastic tree are treated as attributes in a multiattribute utility function.

Suggested Citation

  • Gordon Hazen, 2000. "Preference Factoring for Stochastic Trees," Management Science, INFORMS, vol. 46(3), pages 389-403, March.
    • Handle: RePEc:inm:ormnsc:v:46:y:2000:i:3:p:389-403
    DOI: 10.1287/mnsc.46.3.389.12067
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    References listed on IDEAS

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    1. David B. Matchar & Stephen G. Pauker, 1986. "Transient Ischemic Attach in a Man with Coronary Artery Disease," Medical Decision Making, , vol. 6(4), pages 239-249, December.
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    3. Gordon B. Hazen & James M. Pellissier, 1996. "Recursive Utility for Stochastic Trees," Operations Research, INFORMS, vol. 44(5), pages 788-809, October.
    4. Gordon B. Hazen & James M. Pellissier & Jayavel Sounderpandian, 1998. "Stochastic-Tree Models in Medical Decision Making," Interfaces, INFORMS, vol. 28(4), pages 64-80, August.
    5. Gordon B. Hazen, 1993. "Factored Stochastic Trees," Medical Decision Making, , vol. 13(3), pages 227-236, August.
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    7. Gordon B. Hazen & Wallace J. Hopp & James M. Pellissier, 1991. "Continuous-risk Utility Assessment in Medical Decision Making," Medical Decision Making, , vol. 11(4), pages 294-304, December.
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    Cited by:

    1. Gordon Hazen, 2004. "Multiattribute Structure for QALYs," Decision Analysis, INFORMS, vol. 1(4), pages 205-216, December.
    2. James S. Dyer & James E. Smith, 2021. "Innovations in the Science and Practice of Decision Analysis: The Role of Management Science," Management Science, INFORMS, vol. 67(9), pages 5364-5378, September.
    3. C. Armero & G. García‐Donato & A. López‐Quílez, 2010. "Bayesian methods in cost–effectiveness studies: objectivity, computation and other relevant aspects," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 629-643, June.
    4. Donald L. Keefer & Craig W. Kirkwood & James L. Corner, 2004. "Perspective on Decision Analysis Applications, 1990–2001," Decision Analysis, INFORMS, vol. 1(1), pages 4-22, March.

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