Professional Documents
Culture Documents
Decision Making - Day2 Slides
Decision Making - Day2 Slides
Decision Making - Day2 Slides
Outline
Definitions
Decisions and alternatives
Characterizing decisions
Decision making strategies
Decision making phases
Implications for decision support
Definitions
Choice about a course of action
-- Simon
Choice leading to a certain desired objective
-- Churchman
Knowledge indicating the nature of a
commitment to action
-- Holsapple and Whinston
Example
A farmer with his wolf, goat, and cabbage
come to the edge of a river they wish to
cross. There is a boat at the rivers edge,
but of course, only the farmer can row.
The boat can only handle one animal/item
in addition to the farmer. If the wolf is ever
left alone with the goat, the wolf will eat
the goat. If the goat is left alone with the
cabbage, the goat will eat the cabbage.
What should the farmer do to get across
the river with all his possessions?
Phase I: Intelligence
Problem Solving
State Space Search
Initial State
Goal State
Operators
Choosing representation and controlling the
application of operators requires decision
making
Problem Representation
L
Evaluation
how should each alternative be evaluated?
how reliable is our expectation about the impact
of an alternative?
Choice
What strategy will be used to arrive at a choice?
E.g., DxPlain
Optimizing
Goal: select the course of action with the
highest payoff
estimation of costs and benefits of every
viable course of action
simultaneous or joint comparison of costs
and benefits of all alternatives
high information processing load on humans
people do not have the ``wits to
maximize'' [Simon]
Observations
Satisficing
Decision-makers satisfice rather than maximize
[Simon]. They choose courses of action that are
``good enough''---that meet a certain minimal
set of requirements
Theory of bounded rationality: human beings
have limited information processing
capabilities
Optimization may not be practical, particularly
in a multi-objective problem, yet knowing the
optimal solution for each objective and under
various scenarios can provide insight to make
a good satisficing choice
Selection by Elimination
Eliminate alternatives that do not meet the
most important criterion (screening;
elimination by aspects)
Repeat process for the next important
criterion, and so on
Decision-making becomes a sequential
narrowing down process
Selection by Elimination
``Better'' alternatives might be
eliminated early on---improper weights
assigned to criteria
Decision-maker might run out of
alternatives
For complex problems, this process
might still leave decision maker with
large number of alternatives
Incrementalism
Often, decision-makers have no real awareness
of arriving at a new policy or decision
decision-making is an ongoing process
the satisficing criteria themselves might
change over time
Make incremental improvements over current
situation and aim to reach an optimal situation
over time
Useful for ``fire-fighting'' situations
Frequently found in pluralistic societies and
organizations
Example 1
Which is riskier (probability of serious
accident):
a. Driving a car on a 400 mile trip?
b. Flying on a 400 mile commercial
airline flight?
Example 2
Are there more words in the English
language
a. that start with the letter r ?
b. for which r is the third letter?
Availability
what is easily recalled must be more
likely
Inability to accurately assess the
probability of a particular event happening
Assess based on past experience which may
not be representative
Structured review and analysis of objective
data can reduce availability bias
Example 1
A newly hired programmer for a software
firm in Pittsburgh has two years experience
and good qualifications. When an employee
at Au Bon Pain was asked to estimate the
starting salary she guessed $40,000. What
is your estimate?
a. $30,000 - $50,000?
b. $50,000 - $70,000?
c. $70,000 - $90,000?
Example 2
A newly hired programmer for a software
firm in Pittsburgh has two years experience
and good qualifications. When an employee
at Au Bon Pain was asked to estimate the
starting salary she guessed $80,000. What
is your estimate?
a. $30,000 - $50,000?
b. $50,000 - $70,000?
c. $70,000 - $90,000?
Example
What is the most likely sequence of gender for
series of children born within a family?
- The sequence of BBGGBG, BGBBBG,
BBBBGG?
Example
Mike is finishing his CMU MMM degree.
He is very interested in the arts and at
one time considered a career as a
musician. Is Mark more likely to take a
job:
a. In the management of the arts?
b. A medical management position?
Representativeness
Attempt to ascertain the probability that a
person or object belongs to a particular group or
class by the degree to which characteristics of
that person or object conform to a stereotypical
perception of members of that group or class.
The closer the similarity between the two, the
higher is the estimated probability of association
Small sample size bias
Failure to recognize regression to the mean
(predicted outcomes representative of the input?)
Motivational
Incentives, real or perceived, often lead to
probability estimates that do not
accurately reflect his or her true beliefs
Non-cognitive, motivational biases
Difficult to address through the design of a
DSS
Solicit a number of estimates from similar sources,
both related and unrelated to problem context
Evaluation Metrics
Effectiveness: what should be done
Easier access to relevant information
Faster, more efficient problem recognition and
identification
Easier access to computing tools and models
Greater ability to generate and evaluate large set
of alternatives
Value of DSS
Increase the bounds of rationality