Decision analysis

Published on September 27, 2011 Reviewed on June 27, 2018   61 min
0:00
Have you ever had a difficult decision to make? One that you just could not see your way through. In this presentation, I want to offer decision analysis as an approach, a framework, some tools that can be used to deal with very complicated, very hard decisions. In these series of presentations, you've seen some ways, that as humans we make mistakes, we're biased. And with decision analysis, the hope is that you will get a systematic way to think through decisions and one that will help you avoid some of those mistakes and biases. I'm Bob Clemen. I'm a professor of Decision Sciences at the Fuqua School of Business at Duke University, and I've been involved in decision analysis for over 25 years. I hope you enjoy this quick overview. I will not be able to make you into a complete expert but at least I can walk you through the basics.
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So the first question is, why decision analysis? Why go to all the trouble to learn how to build complicated models and perform intricate analysis? Why not just use your intuition? Why not just use your gut? Should I be able to teach you that? Well, in some cases, your intuition will work. But in many cases and especially these complicated ones, in hard decisions often it doesn't. With my co-author, Terence Reilly, we've gone to a lot of trouble to write a textbook called, "Making Hard Decisions" that is an introduction to decision analysis. And I want to persuade you that we're not making decisions hard with all of the analysis that I'll be talking about. We are trying to deal with hard decisions by using analysis to evaluate those decisions.