Foundations of Decision Analysis

Coherent approach to decision making, using the metaphor of developing a structured conversation having desirable properties, and producing actional thought that leads to clarity of action. Emphasis is on creation of distinctions, representation of uncertainty by probability, development of alternatives, specification of preference, and the role of these elements in creating a normative approach to decisions. Information gathering opportunities in terms of a value measure. Relevance and decision diagrams to represent inference and decision. How to assess the quality of decisions, the role of the decision analysis cycle, framing decisions, the decision hierarchy, biases in assessment, and uncertainty about probability. Sensitivity analysis, joint information, options, flexibility, assessing and using risk attitude, and decisions involving health and safety. Principles are applied to decisions in business, technology, law, and medicine. Corequisite: 120, 220 or equivalent.