Chapter Five
Decision Trees
Our new playmates called themselves Decision Support
consultants and arrived with their 5110 software to acquaint us
with its features. Their offices were in Washington DC in the
States to the South; and their usual clients were Pentagon
Chiefs. Apparently those chiefs now had fewer puzzles to
entertain our consultants because the Vietnam War was history,
and so our itinerant wizards had planned to branch out into the
corporate marketplace. Their firm had put together a version
of the military's decision analysis software attempting to scale
it down to run on IBM's new mini. Eager to be among the first
beneficiaries of the military, we had agreed to beta-test this
mini-computer version of their software and to report to our
chiefs on the viability of these techniques in the real world of
our insurance environment.
That we were leaving the 'real' world was not just the
opinion of the conservatives among our chiefs. Realizing that
our playmates, though experts in the psychology of decision
making, had no prior exposure to the world of insurance and
that, in any event, they would not be readily available once our
brief intro was concluded, made our situation less than
reassuring. To complete this recipe for a wilderness adventure
was the added feature that both hardware and software were
experimental. Our mini was the only one of its kind in Canada
at that point, so support was unlikely and maintenance, if
needed, would be a nightmare. As pièce de résistance,
the software was a beta version; not even a dreaded one-point-oh
would likely have as many surprises.
...
Since the branches, which emanated from any one of
these ´event nodes´, collectively had to describe the entire
range of possibilities at that point, the probabilities assigned
to the branches at an event node had to add to 100%; another
thing to be confirmed. When the complete array of branches
had been drawn out and the probabilities assigned to each
branch, the decision maker then had to guage the benefit or cost
of arriving at the endpoint of each possible sequence of
branches. Even using hypothetical problems,...