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Strategic Economic Decision-Making-I Chapter Examples

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Abstract

This chapter republishes the Bayesian Belief Network (BBN) examples in Grover (2013) using the 9-step protocol of that manual. Manufacturing Example, Political Science Example, Gambling Example, Publicly Traded Company Example, Insurance Example, Acts of Terrorism Example, Currency Wars Example, College Entrance Exams Example, Special Forces Assessment and Selection, Two-Node Example, and Special Forces Assessment and Selection Three-Node Example. This 9-step protocol includes: Step 1: Identify a population of interest, Step 2: Specify a BBN with joint and/or disjoint Nodes, Step 3: Slice through each node, and identify at a minimum, two mutually exclusive or disjoint (unconditional) events, which are the subsets of our population, Step 4: Conduct the random experiment, Step 5: Determine frequency counts, Step 6: Determine prior or unconditional probabilities. Step 7: Determine likelihood probabilities, Step 8: Determine joint and marginal probabilities, and Step 9: Determine posterior probabilities.

This chapter is a corrected and condense version of Grover 2013.

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Notes

  1. 1.

    We will use subjective matter expertise subjective probabilities, for the starting values of the prior and the conditional counts for the likelihood probabilities.

  2. 2.

    The context of this example is from Weiers et al. (2005).

  3. 3.

    The idea of a currency war comes from Rickard (2012). We obtained the data from the OANDA website (OANDA, 2016).

  4. 4.

    We obtained currency data from http://www.oanda.com/.

  5. 5.

    Special Forces (2016).

  6. 6.

    The SFAS course is a 3-week evaluation of enlisted and Officer Soldiers’ physical, mental, and psychological capabilities to determine if they would fit the ranks of special operations Soldiers. Those Soldiers accepted through SFAS will attend either the Officer or Enlisted Special Forces Qualification Course (SFQC), for final selection, to earn the Green Beret. SFAS is only a gateway to the SFQC.

  7. 7.

    See the U.S. Army’s Special Forces website: http://www.sorbrecruiting.com/ (Special Forces, 2016). Last accessed: 5/17/2016.

  8. 8.

    The SFAS course is a 3-week evaluation of enlisted and Officer Soldiers’ physical, mental, and psychological capabilities to determine if they would fit the ranks of special operations Soldiers. Those Soldiers accepted through SFAS will attend either the Officer or Enlisted Special Forces Qualification Course (SFQC), for final selection, to earn the Green Beret. SFAS is only a gateway to the SFQC.

References

  • Grover, J. (2013). Strategic economic decision-making: Using Bayesian belief networks to solve complex problems. In: Springer briefs in statistics (Vol. 9). New York: Springer Science+Business Media. doi:10:1007/978–1–4614–6040–41

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  • Rickard, J. (2012). Currency wars: The making of the next global crisis. New York: Penguin.

    Google Scholar 

  • Special Operations Recruiting. (n.d.). Retrieved November 06, 2016, from http://sorbrecruiting.com/

  • Weiers, R. M., Gray, B. J., & Peters, L. H. (2005). Introduction to business statistics (5th ed.). Mason, OH: South-Western Cengage Learning.

    Google Scholar 

  • WELCOME TO OANDA. (n.d.). Retrieved November 06, 2016, from https://www.oanda.com/

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Grover, J. (2016). Strategic Economic Decision-Making-I Chapter Examples. In: The Manual of Strategic Economic Decision Making. Springer, Cham. https://doi.org/10.1007/978-3-319-48414-3_5

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