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Exploring Relations Between Decision Analysis and Game Theory

Author

Listed:
  • Jules H. van Binsbergen

    (The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, North Carolina 27708)

  • Leslie M. Marx

    (The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, North Carolina 27708)

Abstract
Many authors, including Cavusoglu and Raghunathan (2004. Configuration of detection software: A comparison of decision and game theory approaches. Decision Anal. 1(3) 131--148.) in this journal, have argued that proper modeling of the strategic interaction between players requires a game-theoretic approach as opposed to a decision-theoretic approach. We argue in this paper, however, that there are many environments in which decision analysis can deal with strategic interactions just as well, and we present equivalence results for such environments. These equivalence results allow the prescriptive decision analyst to use the standard tools that a sound decision analysis requires, including decision trees and sensitivity analysis, even when confronted with strategic settings. We further present two technical comments on the Cavusoglu and Raghunathan (2004) paper.

Suggested Citation

  • Jules H. van Binsbergen & Leslie M. Marx, 2007. "Exploring Relations Between Decision Analysis and Game Theory," Decision Analysis, INFORMS, vol. 4(1), pages 32-40, March.
    • Handle: RePEc:inm:ordeca:v:4:y:2007:i:1:p:32-40
    DOI: 10.1287/deca.1070.0084
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    Citations

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    Cited by:

    1. L. Robin Keller & Kelly M. Kophazi, 2011. "From the Editors---Deterrence, Multiattribute Utility, and Probability and Bayes' Updating," Decision Analysis, INFORMS, vol. 8(2), pages 83-87, June.
    2. Rakesh K. Sarin & L. Robin Keller, 2013. "From the Editors: Probability Approximations, Anti-Terrorism Strategy, and Bull's-Eye Display for Performance Feedback," Decision Analysis, INFORMS, vol. 10(1), pages 1-5, March.
    3. Barry R. Cobb & Atin Basuchoudhary, 2009. "A Decision Analysis Approach to Solving the Signaling Game," Decision Analysis, INFORMS, vol. 6(4), pages 239-255, December.
    4. L. Robin Keller, 2011. "Investment and Defense Strategies, Heuristics, and Games: From the Editor ..," Decision Analysis, INFORMS, vol. 8(1), pages 1-3, March.
    5. L. Robin Keller, 2007. "From the Editor..," Decision Analysis, INFORMS, vol. 4(3), pages 111-113, September.
    6. Ali Yekkehkhany & Timothy Murray & Rakesh Nagi, 2021. "Stochastic Superiority Equilibrium in Game Theory," Decision Analysis, INFORMS, vol. 18(2), pages 153-168, June.
    7. Vicki M. Bier & Shi‐Woei Lin, 2013. "Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?," Risk Analysis, John Wiley & Sons, vol. 33(2), pages 281-291, February.
    8. Jesus Rios & David Rios Insua, 2012. "Adversarial Risk Analysis for Counterterrorism Modeling," Risk Analysis, John Wiley & Sons, vol. 32(5), pages 894-915, May.
    9. L. Robin Keller & Ali Abbas & Manel Baucells & Vicki M. Bier & David Budescu & John C. Butler & Philippe Delquié & Jason R. W. Merrick & Ahti Salo & George Wu, 2010. "From the Editors..," Decision Analysis, INFORMS, vol. 7(4), pages 327-330, December.
      • L. Robin Keller & Manel Baucells & Kevin F. McCardle & Gregory S. Parnell & Ahti Salo, 2007. "From the Editors..," Decision Analysis, INFORMS, vol. 4(4), pages 173-175, December.
      • L. Robin Keller & Manel Baucells & John C. Butler & Philippe Delquié & Jason R. W. Merrick & Gregory S. Parnell & Ahti Salo, 2008. "From the Editors..," Decision Analysis, INFORMS, vol. 5(4), pages 173-176, December.
      • L. Robin Keller & Manel Baucells & John C. Butler & Philippe Delquié & Jason R. W. Merrick & Gregory S. Parnell & Ahti Salo, 2009. "From the Editors ..," Decision Analysis, INFORMS, vol. 6(4), pages 199-201, December.
    10. L. Robin Keller & Ali Abbas & J. Eric Bickel & Vicki M. Bier & David V. Budescu & John C. Butler & Philippe Delquié & Kenneth C. Lichtendahl & Jason R. W. Merrick & Ahti Salo & George Wu, 2011. "From the Editors ---Probability Scoring Rules, Ambiguity, Multiattribute Terrorist Utility, and Sensitivity Analysis," Decision Analysis, INFORMS, vol. 8(4), pages 251-255, December.
    11. Michael H. Rothkopf, 2007. "Decision Analysis: The Right Tool for Auctions," Decision Analysis, INFORMS, vol. 4(3), pages 167-172, September.
    12. Saša Zorc & Ilia Tsetlin, 2020. "Deadlines, Offer Timing, and the Search for Alternatives," Operations Research, INFORMS, vol. 68(3), pages 927-948, May.
    13. L. Robin Keller, 2012. "From the Editor---Decisions over Time (Exploding Offers or Purchase Regret), in Game Settings (Embedded Nash Bargaining or Adversarial Games), and in Influence Diagrams," Decision Analysis, INFORMS, vol. 9(1), pages 1-5, March.
    14. L. Robin Keller & Kelly M. Kophazi, 2012. "From the Editors ---Copulas, Group Preferences, Multilevel Defenders, Sharing Rewards, and Communicating Analytics," Decision Analysis, INFORMS, vol. 9(3), pages 213-218, September.
    15. Edouard Kujawski, 2015. "Accounting for Terrorist Behavior in Allocating Defensive Counterterrorism Resources," Systems Engineering, John Wiley & Sons, vol. 18(4), pages 365-376, July.

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