Question

Classical Statistical theory or Decision Theory,Which does the most good fr the least cost?

Answer 1

Ans) Classical Decision theory:

- earliest models of how people make decisions
1. Model of economic M&W
2. Subjective Expected Utility theory

Classical statistical theory:

- The fundamental view of classical statistics is that every statistical analysis is an application to the observed data of a statistical procedure designed for a statistical model. The role of classical statistical theory limits to providing performance measurements and guarantees for any statistical procedure.

- Decision theory is the science of making optimal decisions in the face of uncertainty.

- Statistical decision theory is concerned with the making of decisions when in the presence of statistical knowledge (data) which sheds light on some of the uncertainties involved in the decision problem.

- So, decision theory would be most good at least cost.