Strategy evaluation uses decision science to evaluate the strategies in your plan.

When you run an evaluation, a blue evaluation figure will appear above the strategies in your plan.

You can also generate a detailed evaluation report from the evaluation menu.

Note: During evaluation, plan editing features are limited. To resume editing your plan click the "Exit evaluation" button.

## The science behind strategy evaluation

Strategy evaluation is based on the standard economic model of rational decision making, which when applied to *risky* decisions is known as VNM utility theory.

VNM utility theory provides a robust scientific basis for identifying the relative values a rational decision maker will ascribe to alternative risky strategies.

Litigaze uses VNM utility theory to evaluate the strategies in a plan by taking into account all the user inputted values of the plan, including cards, results, probabilities and risk profiles.

To be considered "rational" under VNM utility theory, a decision maker needs to accept 4 basic assumptions. So long as a decision maker accepts these assumptions, their preferences can be proven to align with VNM utility theory, and therefore Litigaze's strategy evaluation.

The 4 assumptions of VNM utility theory involve basic comparisons between hypothetical chance cards A, B and C as follows.

**1. Completeness assumption**

It is assumed that a decision maker either prefers A over B, prefers B over A, or is indifferent between A and B.

This assumption will hold if a decision maker is able to state a definite preference when comparing any 2 chance cards.

### 2. **Transitivity assumption **

****If a decision maker prefers A over B, and B over C, it is assumed that the decision maker will prefer A over C.

This assumption will hold if a decision maker has mutually-consistent preferences for any 3 chance cards.

### 3. **Independence assumption**

****If a decision maker prefers A over B, it is assumed the decision maker will prefer a chance between A and C, over the same chance between B and C.* *

This assumption will hold if a decision maker's preference between 2 chance cards, A and B, is the same as their preference between equals chances of, on the one hand, A and a third chance card and, on the other, B and the same third chance card.

**4. Continuity assumption**

****If a decision maker ranks A, B, C in that order from most to least preferred, it is assumed the decision maker will be willing to substitute B for a chance between getting either A or C so long as the chance of getting A high enough.

This assumption will hold if a decision maker is able to select a risk profile in Litigaze.