TREE OUTCOME REGISTER FUNDAMENTALS
Why an outcome table is more than a result list
- Terminal completeness
- Every first-stage branch is split into success and failure so no declared probability mass disappears.
- Path order
- Rows retain their logical event-tree order rather than being sorted by payoff, preserving model lineage.
- Probability conservation
- The terminal masses must sum to 100% when the initial branches and conditional splits are complete.
- Signed consequence
- Positive and negative payoffs express direction relative to a declared zero reference, not necessarily success and failure labels.
- Contribution reconciliation
- Adding probability times payoff across rows reconstructs the expected value exactly before display rounding.
MODEL AND FORMULA
How branch and conditional probabilities create four terminal rows
TECHNICAL LANGUAGE
Outcome-register terminology
- Branch partition
- A set of mutually exclusive and collectively exhaustive first-stage states.
- Conditional split
- A probability allocation within a branch after that branch has occurred.
- Terminal pathway
- A complete sequence from the root of the tree to an outcome leaf.
- Running probability
- A cumulative audit total in the displayed path order.
- Expected-value contribution
- The row payoff multiplied by the row path probability.
- Reconciliation
- A check that row masses total one and row contributions total the reported expected payoff.
EVIDENCE AND DATA LINEAGE
Treat each row as an evidence claim
For every terminal path, retain the branch definition, numerator and denominator or elicitation source, conditional population, observation period, payoff worksheet, valuation date, unit, sign convention, and reviewer. Keep an event-tree version identifier and document why the initial branches and downstream outcomes are complete. Do not overwrite a row when estimates change; preserve scenario history.
FREQUENTLY ASKED QUESTIONS
Questions about terminal outcome tables
Why is the cumulative column not sorted from worst to best payoff?
This register preserves logical path order for traceability. A payoff distribution page sorts leaves by payoff when quantiles are the intended question.
Can a success leaf have a negative payoff?
Yes. Success classification and value consequence are distinct. A technically successful path can cost more than its benefit on the selected payoff basis.
What does a 100% probability total prove?
It proves arithmetic conservation within the declared tree. It does not prove that the tree includes every material real-world pathway.
Why retain unrounded contributions?
Small displayed rounding differences can prevent row values from visibly summing to the reported expected payoff. Calculation should reconcile before presentation rounding.
Can I add branch probabilities directly to conditional success rates?
No. Conditional rates apply only after their branch occurs. Multiply along each path, then add mutually exclusive terminal probabilities.
When should the outcome table be expanded?
Expand it when there are more initial states, multiple downstream stages, recovery paths, time-dependent transitions, or distinct consequence categories that materially affect the decision.
IMPORTANT NOTE
Arithmetic completeness is not domain completeness
This outcome register reconciles the entered two-branch tree exactly. It does not prove that the branch structure, probabilities, success definition, payoffs, or omitted pathways are adequate for a financial, safety, medical, legal, or operational decision.