Deterministic or Probablistic Models:

We distinguish between deterministic and probabilistic decision making problems. All the decision models can be classified as either as deterministic or probablistic models. In deterministic models your good decisions bring about good outcomes. You get that what you expect, therefore the outcome is deterministic (i.e., risk-free). However, in probablistic decision models, the outcome is uncertain, therefore making good decisions may not produce good outcomes. Unlike deterministic models where good decision is judged my the outcome alone, in probabilistic models the decision maker is concerned with both the outcome value and the amount of risk each decision carries. We will cover both deterministic and probabilistic decision making process.