Decision Analysis for Management Judgment, 6th Edition

13Decisions involving groups of individuals

Introduction

So far in this book, we have focused on the individual decision-maker, but important decisions are often made by accountable managers working within small groups of people, most, or all, of whom have information that could be utilized in the decision-making process. Often, individuals may differ in their subjective probabilities of events, their utilities of outcomes, or their perception of the future courses of action that may become available as events unfold in the future.

If the opinions and values of individuals differ, how should the differences be resolved? Obviously, several individuals who are involved in decision-making bring together a larger fund of experience, knowledge, and creative insights. It is intuitively reasonable that the chances of overlooking possible events and possible courses of action are diminished in group decision-making. Indeed, the synergy of individuals may make the overall quality of the group decision greater than the sum of the parts. The creation of juries, panels, and cabinets as ways of reaching decisions can be seen to be based on this premise.

This chapter describes and evaluates ways of combining individual judgments to produce ‘improved’ judgments. There are essentially two approaches to the problem: mathematical and behavioral aggregation (although the approaches can be combined). Mathematical aggregation, which we will discuss first, involves techniques such as the calculation ...