Transport investment decisions with Bayesian statistical decision theory

Abstract

This paper presents an optimal decision making process under uncertainty. The basic elements of the Bayesian Statistical Decision Theory which provides the basic framework of the analysis is being presented along with the elements of the traditional statistical decision theory. Subsequently, a simplified example of transport investment decisions is presented where Bayesian Statistics provides the basic elements of future uncertainty. Finally, the example presented is transformed into a computerized program amenable to rapid examination of multiple future events.