The Test and Find Model

Source abstract

We introduce the Test and Find (TF) problem, where a decision maker (DM) faces the following situation: $k$ identical objects are randomly allocated to $n$ distinct boxes (sites) according to some distribution $π$, with no more than one object to a box. The DM tests all of the boxes. However, the tests are imperfect: they can give false positive or false negative results. DM has $m$ tags, $1\leq m\leq n$, and, after testing all boxes, she can place a tag on any box that she thinks has a hidden object. She is rewarded $c_i$ for a correct guess and penalized $d_i$ for a wrong guess in box $i$. DM knows all of the parameters of the model and her goal is to maximize the expected reward. We give an explicit solution to this problem. We then turn to the symmetric case, for which we derive more computationally efficient results. We also consider several extensions of the TF model and give detailed solutions. One of these extensions is to the realistic case where $k$, the number of objects, is unknown and random.