1. Recap of L09: Normative Decision Theory
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Recap of L09: Normative Decision Theory

2. Decision Tree for Oil Wildcatter
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Decision Tree for Oil Wildcatter
Classical way to represent decision problems with multiple decisions
Explicitly show all possible sequences of decisions and observations.
Example: Oil Wildcatter

3. Solving Decision Trees
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Solving Decision Trees

4. Solving Decision Trees
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Solving Decision Trees

5. Page 5

6. Influence Diagram A DAG with three types of nodes
Chance nodes, decision nodes, and utility nodes
There is a directed path containing all the decision nodes.
The utility nodes have no children.
Each chance node is associated with the conditional distribution given its parents.
Each utility node is associated with a utility function, a real-valued function of its parents.

7. Influence Diagram An influence diagram for the oil wildcatter problem
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Influence Diagram
An influence diagram for the oil wildcatter problem
Decision: T: test = {y, n}; D: drill={y, n}
Utility: C: cost of test ; V: Benefit of drilling
Chance:
O: Oil ={dry, wet, soaking}
R: seismic structure
{no-structure, open-structure, closed-structure, no-result}

8. Finding Optimal Policy
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Finding Optimal Policy
First idea:
Convert to decision tree and solve it
Exponential still!
Next:
Variable Elimination Algorithm for solving influence diagrams
Note
BN inference: All orderings give correct result, but might have different complexity
ID: Must use “strong elimination orderings”.