Opportunity Cost
One of the hard parts about life is choosing one option at the expense of another future opportunity
For instance. When looking for a job it’s rare that you get three competing offers at one time. It’s more likely that you can get one interview/offer this week, and a different possibly better offer next week. If we take the current possibly sub-optimal offer we forgo next weeks potential offer for the security of an immediate pay check. However if we don’t take today’s offer and wait for next week we may both have greater financial security and greater job satisfaction… or we may have nothing at all.
In Artificial Intelligence the same applies, every decision made is a decision that commits the program/robot to a course of action which forgoes future options.
The questions to ask are: How do I design a program/robot to make decisions when faced with choices? How do I allow the program to learn from mistakes and make generalizing principles to help guide it when faced with a decision next time?
Of course we might also ask ourselves these very same questions: How do I make decisions? What are my generalizing and guiding principles?
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September 17th, 2008 at 10:27 pm
One of the favorite topics I taught in my graduate Statistics classes was the night on Chi Square distributions and Opportunity loss situations. “Decision Making in the Presence of Uncertainty”. You start out by saying… I do not know… now with that settled, you ask what do I know that I can use to define the probability that I will loose or gain money if I do “x”. One of my favorite scenarios was a guy who saw a weather forecast each Friday and used it to decide how many icees to take to the beach to sell. Buy too many and you loose money on the tub of left over slush. Buy too few and you loose the opportunity to sell more. It was always a great evening for the students and the instructor!
greentheo Reply:
September 22nd, 2008 at 3:09 pm
Interesting… yeah decision theories and algorithms that help make decisions are always fun to play with.
What was the solution to the guy at the beach selling slushies?