MEANING OF STATISTICAL DECISION THEORY
Statistical Decision Theory may be defined as a body of several methods which facilitate the decision-maker to select wisely the best course of action from amongst several alternatives. In general, the problem of statistical decision theory may be stated as follows:
“Given a situation where there are several available alternative courses of action each of which may lead to a set of mutually exclusive outcomes associated with certain probabilities, which course of action should a decision-maker take”?
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