Sequential Decisions: Decision Trees (Arboles De Decisión)

Abstract

This is a course material from the book Managerial Decision Making Under Risk and Uncertainty. The book is originally in Spanish and is untitled as Decisiones empresariales bajo riesgo e incertidumbre. The level of the book is basic. We use very few mathematics and it is expected to be used by managers. In this eigth chapter we analyse the problem of sequencial decisions. In particular we use the decision tree approach. We illustrate the tool with a relatively complex example.