Professional Documents
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Probability
0.6 RiskAversion
0.6 S1 VehicleYear
S1 S2
0.4
0.4 S2 SeniorTrain
0.2 +
0.2 DrivingSkill MakeModel
0 0 DrivingHist
-6 -5.5 -5 -4.5 -4 -3.5 -3 -2.5 -2 -6 -5.5 -5 -4.5 -4 -3.5 -3 -2.5 -2
Negative cost Negative cost Antilock
DrivQuality Airbag CarValue HomeBase AntiTheft
DistributionZ p1 stochastically dominates distribution p2 iff Accident
t Z
t Ruggedness
∀ t −∞ p1(x)dx ≤ −∞ p2(t)dt Theft
OwnDamage
If U is monotonic in x, then A1 with outcome distribution p1
Cushioning OwnCost
stochastically dominates A2 Zwith outcome distribution p2: OtherCost
Z
∞ ∞
−∞ p1(x)U (x)dx ≥ −∞ p2 (x)U (x)dx
MedicalCost
Multiattribute case: stochastic dominance on all attributes ⇒ optimal LiabilityCost PropertyCost
Chapter 16 14 Chapter 16 17
Stochastic dominance contd. Label the arcs + or –
Stochastic dominance can often be determined without SocioEcon
Age
exact distributions using qualitative reasoning GoodStudent
ExtraCar
E.g., construction cost increases with distance from city RiskAversion
Mileage
S1 is closer to the city than S2 VehicleYear
+
⇒ S1 stochastically dominates S2 on cost SeniorTrain
+
DrivingSkill MakeModel
E.g., injury increases with collision speed
DrivingHist
Can annotate belief networks with stochastic dominance information: Antilock
+ DrivQuality
X −→ Y (X positively influences Y ) means that Airbag CarValue HomeBase AntiTheft
For every value z of Y ’s other parents Z Accident
Ruggedness
∀ x1, x2 x1 ≥ x2 ⇒ P(Y |x1, z) stochastically dominates P(Y |x2, z) Theft
OwnDamage
Cushioning OwnCost
OtherCost
MedicalCost LiabilityCost PropertyCost
Chapter 16 15 Chapter 16 18
Label the arcs + or – Preference structure: Deterministic
SocioEcon X1 and X2 preferentially independent of X3 iff
Age
GoodStudent preference between hx1, x2, x3i and hx10 , x20 , x3i
ExtraCar does not depend on x3
Mileage
RiskAversion
VehicleYear E.g., hN oise, Cost, Saf etyi:
+
SeniorTrain h20,000 suffer, $4.6 billion, 0.06 deaths/mpmi vs.
DrivingSkill MakeModel
+ h70,000 suffer, $4.2 billion, 0.06 deaths/mpmi
DrivingHist
Theorem (Leontief, 1947): if every pair of attributes is P.I. of its com-
Antilock
DrivQuality AntiTheft
plement, then every subset of attributes is P.I of its complement: mutual
Airbag CarValue HomeBase
− P.I..
Ruggedness Accident
Theft Theorem (Debreu, 1960): mutual P.I. ⇒ ∃ additive value function:
OwnDamage
Cushioning
V (S) = ΣiVi(Xi(S))
OtherCost OwnCost
Hence assess n single-attribute functions; often a good approximation
MedicalCost LiabilityCost PropertyCost
Chapter 16 19 Chapter 16 22
Label the arcs + or – Preference structure: Stochastic
SocioEcon Need to consider preferences over lotteries:
Age
GoodStudent X is utility-independent of Y iff
ExtraCar preferences over lotteries in X do not depend on y
Mileage
RiskAversion
VehicleYear Mutual U.I.: each subset is U.I of its complement
+ −
SeniorTrain ⇒ ∃ multiplicative utility function:
DrivingSkill MakeModel
+ U = k 1 U 1 + k2 U 2 + k3 U 3
DrivingHist + k 1 k2 U 1 U 2 + k 2 k3 U 2 U 3 + k 3 k1 U 3 U 1
Antilock + k 1 k2 k3 U 1 U 2 U 3
DrivQuality Airbag CarValue HomeBase AntiTheft
−
Routine procedures and software packages for generating preference tests to
Ruggedness Accident identify various canonical families of utility functions
Theft
OwnDamage
Cushioning OwnCost
OtherCost
MedicalCost LiabilityCost PropertyCost
Chapter 16 20 Chapter 16 23
Label the arcs + or – Value of information
SocioEcon Idea: compute value of acquiring each possible piece of evidence
Age
GoodStudent Can be done directly from decision network
ExtraCar
RiskAversion
Mileage Example: buying oil drilling rights
VehicleYear Two blocks A and B, exactly one has oil, worth k
+ −
SeniorTrain Prior probabilities 0.5 each, mutually exclusive
DrivingSkill MakeModel
+ Current price of each block is k/2
DrivingHist “Consultant” offers accurate survey of A. Fair price?
Antilock
DrivQuality AntiTheft
Solution: compute expected value of information
Airbag CarValue HomeBase
−
= expected value of best action given the information
Ruggedness Accident minus expected value of best action without information
Theft Survey may say “oil in A” or “no oil in A”, prob. 0.5 each (given!)
OwnDamage
= [0.5 × value of “buy A” given “oil in A”
Cushioning
OtherCost OwnCost + 0.5 × value of “buy B” given “no oil in A”]
–0
MedicalCost LiabilityCost PropertyCost = (0.5 × k/2) + (0.5 × k/2) − 0 = k/2
Chapter 16 21 Chapter 16 24
General formula
Current evidence E, current best action α
Possible action outcomes Si, potential new evidence Ej
EU (α|E) = max
a
Σi U (Si) P (Si|E, a)
Suppose we knew Ej = ejk , then we would choose αejk s.t.
EU (αejk |E, Ej = ejk ) = max
a
Σi U (Si) P (Si|E, a, Ej = ejk )
Ej is a random variable whose value is currently unknown
⇒ must compute expected gain over all possible values:
!
V P IE (Ej ) = Σk P (Ej = ejk |E)EU (αejk |E, Ej = ejk ) − EU (α|E)
(VPI = value of perfect information)
Chapter 16 25
Properties of VPI
Nonnegative—in expectation, not post hoc
∀ j, E V P IE (Ej ) ≥ 0
Nonadditive—consider, e.g., obtaining Ej twice
V P IE (Ej , Ek ) 6= V P IE (Ej ) + V P IE (Ek )
Order-independent
V P IE (Ej , Ek ) = V P IE (Ej ) + V P IE,Ej (Ek ) = V P IE (Ek ) + V P IE,Ek (Ej )
Note: when more than one piece of evidence can be gathered,
maximizing VPI for each to select one is not always optimal
⇒ evidence-gathering becomes a sequential decision problem
Chapter 16 26
Qualitative behaviors
a) Choice is obvious, information worth little
b) Choice is nonobvious, information worth a lot
c) Choice is nonobvious, information worth little
P( U | Ej ) P( U | Ej ) P( U | Ej )
U U U
U2 U1 U2 U1 U2 U1
(a) (b) (c)
Chapter 16 27