Evaluate and Compare Strategies
Once the model is complete, TreeAge Pro automatically generates the algorithms required to evaluate the model and choose the optimal strategy. This allows you to focus on the problem at hand and not the calculations needed to evaluate the model.
Standard algorithms give weight to each possible outcome within the strategy based on its probability. The combined weighted average generates an overall expected value for each strategy.
Analyses can choose the optimal strategy based on a comparison of all options. Tree preferences control the method of comparison from among these choices – maximum, minimum, cost-benefit, multi-attribute or cost-effectiveness (requires Healthcare Module). Models can also store multiple metrics for value. Then, simply change the active metric and reanalyze the same model.
When the model from above is analyzed using Roll Back, expected values (EVs) are calculated at all nodes. At the decision node, the maximum value is selected as the optimal strategy.
Legal Tree Rolled Back
TreeAge Pro allows you to study how uncertainty in a model’s inputs affect the conclusions we can draw via its outputs. In order to study uncertainty of an individual parameter, the parameter must be represented by a variable. The variable then can be analyzed over a range of uncertainty rather than using a single point estimate.
The model below evaluates to the same values as the earlier models, but three independent parameters are defined using variables. Those variables are then referenced within the model in probability and value expressions.
Legal Tree with Variables
Now the model can be evaluated using sensitivity analysis to study uncertainty. For example, the following analysis uses a range for the pWin variable from 0.5 to 0.7 with four intervals. This analysis reevaluates the model at pWin values 0.5, 0.55, 0.6, 0.65 and 0.7, then shows the EV of each strategy based on the parameter range.
Sensitivity Analysis on Legal Tree
The graph above identifies a threshold at the pWin value of 0.55.
- If pWin is less than 0.55, then the Settlement Offer EV is higher.
- If pWin is greater than 0.55, then the Litigate EV is higher.