Topic 3: Decision Making
3 enviroments
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--> under certainty
--> under uncertainty
--> under risk
RISK ADVERSE --> RISK NEUTRAL --> RISK TAKEN
1. Under Certainty
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- have complete information
- use: rasional comparison
2. Decision Under uncertainty
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- no helpful/useless information, unpredictable
- use : experience, discretion, gut feel (emotion)
3. Decision Under Risk
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- given estimate of probability (p) of 'Success vs Failure' */
- use : decision making techniques (e.g decision tree)
Rational decision making process
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1. Defining problems --> 2. Identify decision criteria --> 3. Allocating weight to each criteria -->
4. Generating Alternative --> 5. Evaluating Alternative --> 6. Selecting the optimal decision
SHORT NOTE BBPP1103 : Topic 3 Decision Making
19:58
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