Policy makers in governments and management in businesses are experiencing ever more complex situations these days in light of their economic surroundings, stakeholders, organizations, etc. To make rational and sound decisions in policy making or management strategy, they seek for transparent methodologies and tools that have a basis on objective information and quantitative analyses.
In this lecture, students will learn the theory and practice of Decision Analysis (DA). DA is a school among theories of decision making that is on the basis of probability, optimization, and expected utility theories, and that is intended to offer a framework of “normative” decision making. Related disciplines include management science/operations research and microeconomics. This lecture thus also works as a good introduction to these subjects.