DECISION TREES
- When decisions involve more than one set of uncertainties or more than one decision point, a tree-type format is a more useful decision aid than a tabular format.
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- Decision trees are graphical representations that consist of four elements:
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- Branches: straight lines that terminate at each end with one of three types of nodes
- Decision nodes: depicted as squares
- Event, or chance nodes: depicted as circles
- Payoff nodes: depicted as price tags