modified CAM
I was reading a math methods for MBA students textbook this week and ran into a modified version of Munger's Criteria Alternatives Matrix. It compares different degrees of a policy against a random variable representing the 'state of nature.' For example: a proposal to build a new concert venue with county tax revenues could be set up as follows:
worst case base case best case
large venue -1200 -200 1800
medium venue -600 300 1100
small venue -50 400 700
This gives payoffs (in thousands) associated with worst case, base case, and best case attendance scenarios. The best part is that probabilities from surveys can be assigned to each of the 'states of nature.' This means that bureaucrats can make informed choices about how to implement policy by comparing expected net benefits...
worst case base case best case
large venue -1200 -200 1800
medium venue -600 300 1100
small venue -50 400 700
This gives payoffs (in thousands) associated with worst case, base case, and best case attendance scenarios. The best part is that probabilities from surveys can be assigned to each of the 'states of nature.' This means that bureaucrats can make informed choices about how to implement policy by comparing expected net benefits...
posted by bob_fawson at 10:09 PM
1 Comments:
Nerd. Reading a math methods textbooks, who do you think you are?
I enjoy the worst, base, and best case divisions.
Do think that this "modified CAM," like Mungers, is better for organizing a decision rather than making a deciesion itself?
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