Introduction to Stochastic Optimisation and Game Theory

Decision problems may be classified in different ways. They may be either static or dynamic. In the static situation, decisions have to be made only once, whereas a dynamic problem involves multiple decisions over time. Decision problems may also be either deterministic or stochastic. In a deterministic problem, uncertainty is assumed to be insignificant and is ignored, whereas in a stochastic problem, the effect of uncertainty is included in the modelling, and this is done through the presence of random variables.