Loss Function - Decision Rules

Decision Rules

A decision rule makes a choice using an optimality criterion. Some commonly used criteria are:

  • Minimax: Choose the decision rule with the lowest worst loss — that is, minimize the worst-case (maximum possible) loss:
  • Invariance: Choose the optimal decision rule which satisfies an invariance requirement.
  • Choose the decision rule with the lowest average loss (i.e. minimize the expected value of the loss function):

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