Decision Analysis

Recommended Prerequisites

Basic knowledge about probabilities.

Teaching Methods

Classroom interaction:

- Presentation of the themes promoting debate (student-student and student-teacher).

- Solving (by students, individually or in small groups, or by the teacher) of cases that illustrate the practical relevance of the themes and different decision aiding strategies.

- Role-playing.

The presentation of the themes and the study of cases emphasize the motivation of the students for studying the themes being addressed, by using concrete examples (from newspapers, from employment opportunity ads). When opportune, the related research activities of the teacher are mentioned.

Learning Outcomes

O1. To know the different stages of a decision process and the information to be gathered and organized.

O2. To enunciate and to avoid common errors in decision making processes, avoiding simplistic approaches and sustaining the advantages of formal decision aiding methodologies.

O3. To take part in decision processes, either as a decision maker or as a consultant, by building appropriate models, to deal with uncertainty, to ponder multiple evaluation criteria and opinions, and to involve the different stakeholders.

O4. To recognize that there exist multiple decision aiding methodologies, each one with its advantages and disadvantages, being able of sustaining that some are more adequate than others.

These learning outcomes contribute to develop several generic skills, namely those of critical reasoning, analysis and synthesis, problem solving, information interpretation and management, and group interaction. 

Work Placement(s)

No

Syllabus

Three recurring themes in decision processes are addressed: to deal with uncertainty, to aggregate multiple evaluation criteria, and to determine a collective preference form individual preferences:

1. Introduction to the course and the theme of decision analysis

2. Multicriteria evaluation

     2.1. Structuring: actors, actions, points of view, criteria, scales and problem types

     2.2. How decisions are made: a few simple methods

     2.3. Additive multiattribute value/utility functions

     2.4. ELECTRE methods

3. Decision under uncertainty

     3.1. Heuristics and biases

     3.2. Simple decision rules and expected value criterion

     3.3. Decision trees and influence diagrams

     3.4. Expected value of information

     3.5. Expected utility theory

4. Group decision

     4.1. Social choice: simple voting, multiple voting, ordinal voting

     4.2. Social choice: theoretical results

     4.3. Decisions without voting.

Head Lecturer(s)

Luís Miguel Cândido Dias

Assessment Methods

Assessment
Periodic or by final exam as given in the course information: 100.0%

Bibliography

DIAS, Luís C. — Apontamentos de análise de decisão : como considerar múltiplos critérios. Coimbra : FEUC, 2002. [BP 519.8 DIA]

CLEMEN, Robert T. - Making hard decisions : an introduction to decision analysis. 2nd ed. Pacific Grove : Duxbury Press, 1996. [BP 519.8 CLE].

GOODWIN, Paul ; WRIGHT, George — Decision analysis for management judgment. Chichester : John Wiley & Sons, 2001. [BP 519.8 GOO]

ISHIZAKA, Alessio; NEMERY, Philippe — Multi-Criteria Decision Analysis : Methods and software, Chichester: Wiley, 2013. [BP 519.8 ISH]

HWANG, Ching-Lai ; LIN, Ming-Jeng — Group decision making under multiple criteria : methods and applications. Berlin : Springer-Verlag, 1987. [BP 519.8 HWA]

NURMI, Hannu — Comparing voting systems. Dordrecht : D. Reidel Publishing Company, 1987. [BP 330.1 NUR].