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Decision Rules and Decision Analysis
A decision rule is a logical statement of the type "if [condition], then [decision]." The following is an example of a decision rule experts might use to determine an investment quality rating:If the year's margin is at least 4.27 percent and the year's ratio of shareholder funds to fixed assets is at least 35.2 percent, then the class of rating is at least lower investment grade (LIG).The condition in this decision rule is "the year's margin is at least 4.27 percent and the year's ratio of shareholder funds to fixed assets is at least 35.2 percent," while "the class of rating is at least lower investment grade" is the decision part of the rule.Decision rules give a synthetic, easily understandable, and generalized representation of the knowledge contained in a data set organized in an information table. The table's rows are labeled by objects, whereas columns are labeled by attributes; entries in the body of the table are thus attribute values. If the objects are exemplary decisions given by a decision maker, then the decision rules represent the preferential attitude of the decision maker and enable understanding of the reasons for his or her preference.People make decisions by searching for rules that provide good justification of their own choices. However, a direct statement of decision rules requires a great cognitive effort from the decision maker, who typically is more confident making exemplary decisions than explaining them. For this reason, the idea of inferring preference models in terms of decision rules from exemplary decisions provi...See the full content of this document
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