Implications for the Manager
The key point from this chapter is that if the decision has already been made, there’s no value in further analysis, studies, tests, or data. Only if you are willing to change your mind is there value in more information.
The value of control lets you know the maximum that you would pay to hedge an uncertainty. It also lets you know the most that you would fund technology which, when developed, could mitigate a chance event or control an uncertainty.
When David Skinner and I teach DA together, if we have time, we include a fun and interesting exercise around a game of chance with difficult-to-calculate odds, an auction, and a prize of significant but uncertain value. This exercise allows us to introduce decision trees, ...