Aalto Systems Forum
Improving and Measuring the Effectiveness of Decision Analysis:
Linking Decision Analysis and Behavioral Decision Research
A Public Lecture by Prof. Robert Clemen
Thursday, January 10th at 14.00-16.00
Riihi room (U229a), Systems Analysis Laboratory, Otakaari 1 M, Aalto University School of Science, Espoo
Although behavioral research and decision analysis began with close ties, that connection appears to have diminished over time. This talk will consider two distinct ways to reestablish the connection. First, many theoretical and empirical results in behavioral research can provide a basis for crafting improved prescriptive decision analysis methods. Several productive applications of behavioral results to decision analysis are reviewed, and suggestions are made for additional areas in which behavioral results can be brought to bear on decision analysis methods in precise ways.
The second way to reconnect behavioral research and decision analysis involves the development of new empirical methods for evaluating the effectiveness of prescriptive techniques. New techniques, including behaviorally-based ones such as those proposed above, will undoubtedly be subjected to validation studies as part of the development process. However, validation studies typically focus on specific aspects of the decision-making process and do not answer a more fundamental question: Are the proposed methods effective in helping people achieve their objectives? More generally, if we use decision analysis techniques, will we do a better job of getting what we want over the long run than we would if we used some other decision-making method? In order to answer these questions, we must develop methods that will allow us to measure the effectiveness of decision-making methods. I identify two types of effectiveness. The first follows from the notion that individuals typically make choices based on their own preferences and often before all uncertainties are resolved. A decision-making method is said to be weakly effective if it leads to choices that can be shown to be preferred (in a way that I will make precise) before consequences are experienced. In contrast, when the decision maker actually experiences his or her consequences, the question is whether decision analysis helps individuals do a better job of achieving their objectives in the long run. A decision-making method that does so is called strongly effective. I will propose some methods for measuring effectiveness, discuss potential research paradigms, and suggest possible research projects.
Link to a related paper
The event is free of charge and open for all who are interested. The event will be held in English.
Aalto Systems Forum
The growing challenge of our time is the need to have the ability to see and manage wholes, i.e. systems. The Aalto Systems Forum aims to be a platform of dialogue for practitioners and researchers to share the latest results of the field by top international scholars.
Aalto Systems Forum is organized by the Systems Analysis Laboratory research group at the Department of Mathematics and Systems Analysis of Aalto University School of Science. http://www.sal.hut.fi/en/aaltosystemsforum /