AlphaBrain

Chapter 4Decision Analysis

We Are All Students of the Same Game

Students in my Decision Analysis class have to create one decision log per week. The assignment requires that they analyze an actual decision they have faced or are currently facing. The decisions they choose to analyze include whether they should break up with their girlfriend or boyfriend, where they should go for spring break, what job to accept and how much to spend on their weddings. Initially I provide very little guidance, so they do their best to produce an analysis that they believe will show me they are methodical and deliberate in their approach. Even when it is clear that they simply chose the path of least resistance, they will attempt to generate a narrative that explains their approach as rational and thoughtful.

Much to their chagrin, I actually provide very little advice as it specifically relates to the assignment throughout the entire semester. At least that's what many of them believe. Truth is, the entire course, including reading material, case studies, and lectures is about the process of decision‐making. We cover statistical concepts such as probabilities and Bayes Theorem, mistakes some very smart people have made in applying these concepts, the components of a decision, and real‐world examples for applying it all to actual business and policy decisions. Students are also exposed to esoteric terms used to describe proper process and systematic errors. I purposely provide little guidance ...