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Article
Trees and Decisions
Economic Theory (2005)
  • Carlos Alós-Ferrer, University of Konstanz
  • Klaus Ritzberger
Abstract

The traditional model of sequential decision making, for instance in extensive form games, is a tree. Most texts define a tree as a connected graph without loops and a distinguished node, called the root. But a graph is not a domain for decision theory. Decision theory perceives of acts as functions from states to consequences. Sequential decisions, accordingly, get conceptualized by mappings from sets of states to sets of consequences. Thus, the question arises whether a natural definition of a tree can be given, where nodes are sets of states. We show that, indeed, trees can be defined as specific collections of sets. Without loss of generality the elements of these sets can be interpreted as representing plays. Therefore, the elements can serve as states and consequences at the same time.

Keywords
  • Extensive Forms,
  • Trees
Disciplines
Publication Date
2005
Citation Information
Carlos Alós-Ferrer and Klaus Ritzberger. "Trees and Decisions" Economic Theory Vol. 25 Iss. 4 (2005)
Available at: http://works.bepress.com/alos/3/