Selection of certain dichotomous experiments

Summary The problem of allocating a single observation to one of the two available populations is considered. Suppose that a certain characteristic has densityf in one population, and has densityg in the other. On the basis of the value observed, one must specify which population has densityf. It is assumed that when a wrong population is chosen, a certain known loss is incurred. The problem is to allocate the observation so as to minimize the expected loss. General conditions onf andg are derived to decide which population should be selected for taking the observation. Research was supported in part by the National Science Foundation under grant No. SOC79-06386. Work done while on sabbatical leave at Carnegie-Mellon University.