Abstract

Abstract This article is concerned with the problem of deciding whether the mean θ of a normal distribution of known variance lies in a specified finite interval θ-, θ+). Consideration is given to prior information on θ and to quadratic and piecewise linear utility structures. Computer-aided methods are described for obtaining the optimal decision rule given a sample of observations and for obtaining the optimal sample size when the sampling cost is a linear function of the sample size. Some simpler approximate methods are also described.

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