Book contents
- Making Decisions: Analytics, Cognition, and Application
- Making Decisions: Analytics, Cognition, and Application
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- Acknowledgments
- Copyright Acknowledgements
- Part I Analytics: Probability, Evaluation, Decision Trees, and Strategies for Decision Making
- 1 Introduction to Decision Theory and Decision Making
- 2 Thinking Like a Gambler: For All the Gambles of Life
- 3 Using Decision Trees to See through the Forest Ahead
- 4 Strategies for Decision Making in an Environment of Risk: How to Get the Most and Avoid the Worst, No Matter What
- Introduction to Part II: Cognitive Processes of Decision Making
- Part III Applications, Examples, and Selected Topics
- References
- Index
1 - Introduction to Decision Theory and Decision Making
from Part I - Analytics: Probability, Evaluation, Decision Trees, and Strategies for Decision Making
Published online by Cambridge University Press: aN Invalid Date NaN
Book contents
- Making Decisions: Analytics, Cognition, and Application
- Making Decisions: Analytics, Cognition, and Application
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Preface
- Acknowledgments
- Copyright Acknowledgements
- Part I Analytics: Probability, Evaluation, Decision Trees, and Strategies for Decision Making
- 1 Introduction to Decision Theory and Decision Making
- 2 Thinking Like a Gambler: For All the Gambles of Life
- 3 Using Decision Trees to See through the Forest Ahead
- 4 Strategies for Decision Making in an Environment of Risk: How to Get the Most and Avoid the Worst, No Matter What
- Introduction to Part II: Cognitive Processes of Decision Making
- Part III Applications, Examples, and Selected Topics
- References
- Index
Summary
Decision theory and decision making are multidisciplinary topics. Decision theory includes psychology, especially cognitive psychology, because decisions are cognitive processes. Decision theory also includes math, especially probability, as people often make decisions based on likelihood. Decision making is an applied topic pertaining to business, engineering, science, politics, other disciplines, and of course to personal decisions.
Descriptive models of decision theory explain decisions as cognitive processes, how and why people make the choices they do. Normative decision models describe how people should conceptualize a decision. Prescriptive models include mathematically based analyses that provide actionable solutions to real-world problems.
Decisions are made in one of three environments. Under certainty, the decision maker can make a choice and be sure what the outcome will be. Under risk, the decision maker will make a choice knowing in advance the probabilities of various outcomes. Under uncertainty, the possible outcomes and probabilities are unknown.
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- Publisher: Cambridge University PressPrint publication year: 2025
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