In a fully specified decision tree diagram I would also have labels along each horizontal branch, probabilities along each event branch, and consequence values at the terminal end of each event branch (see this previous blog for an example). I won't be going into such details in this blog because I want to focus on the first step in diagramming a decision tree; namely, drawing the skeletal structure of a decision tree.
If you want to diagram decisions it is useful to have a tool that makes it easy to do so. A piece a paper is a good option, but I wanted to use a piece of software to create decision tree diagrams exactly as they appear in the textbook mentioned above. The draw.io tool fits these requirements. In a previous blog I demonstrated a more complex approach to creating decision trees. In this blog I wanted to find a more accessible approach that anyone could use without installing a bunch of software.
Decision trees have lots of symmetrical branches and drawing them was the main challenge I had in making decision tree skeletons. Duplicating and dragging horizontal or vertical lines were the main actions I ended up using to create the symmetrical decision tree diagram above. The left column in the figure above shows the "General" and the "Misc" symbol libraries that I used to create the square, circle, and line shapes. By default they are available to use when you access the draw.io online application and you just need to click the library name to open it and access the diagramming shapes you want to use.
It would be possible to print off a decision tree template like this so you can write labels and numbers onto it. It would be a ready-made template for a common form of decision problem, namely, a decision with 2 possible choices and 2 possible event outcomes that will determine the expected consequences for each choice.
In this blog my goal was to suggest some software you can use to create decision tree diagrams (draw.io) and how you can go about creating nice symmetrical tree diagrams with it. There are probably more efficient techniques to use than what I'm suggesting as I just started playing around with draw.io for this purpose and the duplicate and drag approach was the first approach that worked ok. We can use decision tree diagrams to explore a wide range issues in decision making and in future blogs we'll explore some of these issues.
Here are some useful tips that will get you up to speed quickly using draw.io.
Connecting California Entrepreneurs and Investors.
Notice: The California Investment Network is owned by
Dealfow Solutions Ltd. The California Investment Network is part
of a network of sites, the Dealflow Investment Network, that provides a platform
for startups and existing businesses to connect with a combined pool of potential
funders. Dealflow Solutions Ltd. is not a registered broker or dealer and
does not offer investment advice or advice on the raising of capital. The
California Investment Network does not provide direct funding or make any
recommendations or suggestions to an investor to invest in a particular company.
It does not take part in the negotiations or execution of any transaction or deal.
The California Investment Network does not purchase, sell, negotiate,
execute, take possession or is compensated by securities in any way, or at any time,
nor is it permitted through our platform. We are not an equity crowdfunding platform
or portal. Entrepreneurs and Accredited Investors who wish to use the California Investment Network
are hereby warned that engaging in private fundraising and funding activities can expose you to
a high risk of fraud, monetary loss, and regulatory scrutiny and to proceed with caution
and professional guidance at all times.