Decisions, Decisions: How to make good decisions

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Decisions, DecisionsHow to make good decisions

• Alleene Anne Ferguson Pingenot, Ph.D.
• HealthQWest Decision Making Program
• University of Stirling

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How Do You Know a Decision is Good?

• options grow out of values, in the light of
  situational constraints and opportunities.
• Ward Edwards (1999)

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Decision Analysis

• Used to
• evaluate programs
• allocate resources to conflicting interests
• provide guidance for on-going programs
• Tool Multi-attribute Utility Technology
• (MAUT)

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Decisions Under Uncertainty

• The probability of x reflects only how much one
  knows about x
• Whether a decision is good or not is about
  process, not outcome
• If the outcome is certain, there is no decision
  to be made

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MAUT is based on 6 Principles

• Compare alternatives
• Ensure all stakeholders are represented
• Expect multiple conflicting goals
• There will always be a subjective component
• When judging magnitude, use numerical statements
• Stay on task

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Essential Elements of Decision Analysis
Logic
A L T E R N A T I V E
P R E F E R E N C E
K N O W L E D G
Howard, 2007
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How To Make a Rational Decision Specify the
Problem

• Describe the problem
• 2. What is the goal of the decision?
• 3. Identify stakeholders
• 4. Identify values of stakeholders
• 5. Identify options

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Select a Way to Analyse the Problem

• Is uncertainty the key?
• Is conflicting values between different
  stakeholders key?
• What kind of analysis best captures and
  structures the issues?

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Develop a Detailed Structure for Analysis

• Multi-Attribute Utility Analysis
• Options across top
• Prioritized Values down left side

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Summary

• Most of the up front work is in defining the
  problem and setting goal
• Ensure that have clear idea of who is making the
  final decision (and why)
• Ensure all stakeholders are involved in the
  process

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Summary, Continued

• Values and their prioritization involves
  discussion by all stakeholders
• From that discussion, keeping original goal in
  mind select options from which to choose
• Finally, rate options on the prioritized values

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In Closing

• Decision Making carries no guarantee of ideal
  results
• Study the problem together to structure it in
  such a way that you make the best decision with
  the knowledge you have at the time under the
  constraints that exist

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Notes How do you know a decision is
Good?  Edwards (quoted by Vlek in Shanteau,
Mellers and Schum, 1999)  Evaluating a decision
as good or not must depend on the stakes and the
odds, not on the outcome....options grow out of
values, in the light of situational constraints
and opportunities. He then goes on to discuss
the importance of carefully structuring the
problem for decision analysis.  Decision analysis
was one of the many important practical
contributions Ward Edwards made to the study of
decision making.  A very practical method of
decision analysis he developed is
Multi-attribute Utility Technology (MAUT).
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• MAUT
•  
• Used for evaluating program, allocating resources
  to conflicting interests, and providing guidance
  ongoing programs.
• Designed to be easily used by people not familiar
  with technical issues of decision analysis.
• Based on 6 principles (paraphrased from Edwards
  Newman, 1982)

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• The Six Principles
• Evaluations should compare alternatives
• Ensure all stakeholders should be represented
  Useful for situations where there are multiple
  stakeholders in the decision to be made
• Expect to have multiple conflicting goals, but
  not all are of equal importance.Evaluations need
  to assess how well a course of action serves each
  goal.Therefore use multiple measures of
  effectiveness subjective numerical estimates of
  how much, how long, etc. data from research
  when available
• Judgements are inevitably a part of any
  evaluation. (there will always be a subjective
  component to evaluation)
• When judging magnitude, use numerical statements
  (simplifies combining estimates into an overall
  evaluation)
• Evaluations generally should be relevant to the
  decision. (stay on task)

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Suggested further reading Smart Choices A
Practical Guide to Making Better Decisions
(Paperback) by John S. Hammond, Ralph L. Keeney,
Howard Raiffa quote "decisions shape our
lives..."  (Note although this book is written
for lay readers, the authors are well known
leaders in the field of decision making research)