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© K.Fedra 200042
Decision Support SystemsDecision Support SystemsDecision Support SystemsDecision Support Systems
an introduction to DSS with an introduction to DSS with environmental application environmental application
examplesexamples
an introduction to DSS with an introduction to DSS with environmental application environmental application
examplesexamples
© K.Fedra 200043
What is a DSS ?What is a DSS ?What is a DSS ?What is a DSS ?
• Attempts at definitionAttempts at definition
• Decision making processesDecision making processes
• A general DSS architectureA general DSS architecture
• Decision Support ParadigmsDecision Support Paradigms
• Application examplesApplication examples
• Attempts at definitionAttempts at definition
• Decision making processesDecision making processes
• A general DSS architectureA general DSS architecture
• Decision Support ParadigmsDecision Support Paradigms
• Application examplesApplication examples
© K.Fedra 200044
DSS DefinitionDSS DefinitionDSS DefinitionDSS Definition
A DSS is a computer based A DSS is a computer based
problem solving system that problem solving system that
assists assists choicechoice between between
alternativesalternatives in complex and in complex and
controversial domains.controversial domains.
A DSS is a computer based A DSS is a computer based
problem solving system that problem solving system that
assists assists choicechoice between between
alternativesalternatives in complex and in complex and
controversial domains.controversial domains.
© K.Fedra 200045
DSS DefinitionDSS DefinitionDSS DefinitionDSS Definition
Problem solving:Problem solving:
Problem:Problem: when the observed or perceived when the observed or perceived
(expected) state of a system differs from the (expected) state of a system differs from the
expectations, norms, goals.expectations, norms, goals.
If the expectation is optimisation (maximisation, If the expectation is optimisation (maximisation,
growth) we always have a problem (more than growth) we always have a problem (more than
yesterday, more than others)yesterday, more than others)
Problem solving:Problem solving:
Problem:Problem: when the observed or perceived when the observed or perceived
(expected) state of a system differs from the (expected) state of a system differs from the
expectations, norms, goals.expectations, norms, goals.
If the expectation is optimisation (maximisation, If the expectation is optimisation (maximisation,
growth) we always have a problem (more than growth) we always have a problem (more than
yesterday, more than others)yesterday, more than others)
© K.Fedra 200046
DSS DefinitionDSS DefinitionDSS DefinitionDSS Definition
A DSS provides A DSS provides • structured presentation structured presentation • problem context, problem context, • and tools for theand tools for the
– design, – evaluation,– selection
of alternativesof alternatives
A DSS provides A DSS provides • structured presentation structured presentation • problem context, problem context, • and tools for theand tools for the
– design, – evaluation,– selection
of alternativesof alternatives
© K.Fedra 200047
What is a DSS ?What is a DSS ?What is a DSS ?What is a DSS ?
• Attempts at definitionAttempts at definition
• Decision making processesDecision making processes• A general DSS architectureA general DSS architecture
• Decision Support ParadigmsDecision Support Paradigms
• Application examplesApplication examples
• Attempts at definitionAttempts at definition
• Decision making processesDecision making processes• A general DSS architectureA general DSS architecture
• Decision Support ParadigmsDecision Support Paradigms
• Application examplesApplication examples
© K.Fedra 200048
Decision making processesDecision making processesDecision making processesDecision making processes
Handbook of ORHandbook of OR (B.E.Gillet, 1976):(B.E.Gillet, 1976):
• Formulation of the problemFormulation of the problem• Construction of a mathematical modelConstruction of a mathematical model• Derive solution from modelDerive solution from model• Testing model and solutionTesting model and solution• Establish control over the solutionEstablish control over the solution• Put it to work (implementation)Put it to work (implementation)
Handbook of ORHandbook of OR (B.E.Gillet, 1976):(B.E.Gillet, 1976):
• Formulation of the problemFormulation of the problem• Construction of a mathematical modelConstruction of a mathematical model• Derive solution from modelDerive solution from model• Testing model and solutionTesting model and solution• Establish control over the solutionEstablish control over the solution• Put it to work (implementation)Put it to work (implementation)
© K.Fedra 200049
Decision making processesDecision making processesDecision making processesDecision making processes
HeuristicsHeuristics (How to solve it, G.Polya)(How to solve it, G.Polya)
• understand the problemunderstand the problem
• make a plan (algorithm)make a plan (algorithm)
• implement step by stepimplement step by step
• check each stepcheck each step
• check the solution (looking back)check the solution (looking back)
HeuristicsHeuristics (How to solve it, G.Polya)(How to solve it, G.Polya)
• understand the problemunderstand the problem
• make a plan (algorithm)make a plan (algorithm)
• implement step by stepimplement step by step
• check each stepcheck each step
• check the solution (looking back)check the solution (looking back)
© K.Fedra 2000410
Decision making processesDecision making processesDecision making processesDecision making processes
(in the real world)(in the real world) are characterized by: are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
(in the real world)(in the real world) are characterized by: are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000411
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000412
Decision making processesDecision making processesDecision making processesDecision making processes
multiple actors:multiple actors:multiple actors:multiple actors:• researchers and analystsresearchers and analysts• planners and managersplanners and managers• policy and decision makerspolicy and decision makers• general public:general public:
• consumers (market)consumers (market)• concerned citizen (voters)concerned citizen (voters)
• researchers and analystsresearchers and analysts• planners and managersplanners and managers• policy and decision makerspolicy and decision makers• general public:general public:
• consumers (market)consumers (market)• concerned citizen (voters)concerned citizen (voters)
© K.Fedra 2000413
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000414
Decision making processesDecision making processesDecision making processesDecision making processes
Uncertainty:Uncertainty:
All elements are “uncertain”:All elements are “uncertain”:
• Criteria, Criteria,
• Objectives, Objectives,
• ConstraintsConstraints
Uncertainty:Uncertainty:
All elements are “uncertain”:All elements are “uncertain”:
• Criteria, Criteria,
• Objectives, Objectives,
• ConstraintsConstraints
© K.Fedra 2000415
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000416
Decision making processesDecision making processesDecision making processesDecision making processes
conflicting objectives:conflicting objectives:• maximize economic benefits maximize economic benefits • minimize environmental costsminimize environmental costs• maximize environmental benefitsmaximize environmental benefits• minimize economic costsminimize economic costs• maintain equitymaintain equity::
• between social groupsbetween social groups• between regions and countriesbetween regions and countries• between generationsbetween generationsSUSTAINABILITYSUSTAINABILITY
• maximize economic benefits maximize economic benefits • minimize environmental costsminimize environmental costs• maximize environmental benefitsmaximize environmental benefits• minimize economic costsminimize economic costs• maintain equitymaintain equity::
• between social groupsbetween social groups• between regions and countriesbetween regions and countries• between generationsbetween generationsSUSTAINABILITYSUSTAINABILITY
© K.Fedra 2000417
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000418
Decision making processesDecision making processesDecision making processesDecision making processes
multiple criteria:multiple criteria:• economic criteria economic criteria (costs)(costs)
• environmental criteriaenvironmental criteria• standards standards (measurements)(measurements)
• perceptions perceptions (believes, fears)(believes, fears)
• political criteria political criteria (equity)(equity)
• regulatory criteria regulatory criteria (constraints)(constraints)
• technological criteria technological criteria (constraints)(constraints)
• economic criteria economic criteria (costs)(costs)
• environmental criteriaenvironmental criteria• standards standards (measurements)(measurements)
• perceptions perceptions (believes, fears)(believes, fears)
• political criteria political criteria (equity)(equity)
• regulatory criteria regulatory criteria (constraints)(constraints)
• technological criteria technological criteria (constraints)(constraints)
© K.Fedra 2000419
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000420
Decision making processesDecision making processesDecision making processesDecision making processes
plural rationalitiesplural rationalities
rationalrational: relating to, based on, : relating to, based on, agreeable to agreeable to reasonreason. .
reason: the power of inferring, reason: the power of inferring, comprehending, or thinking in an comprehending, or thinking in an orderly, orderly, rational rational way.way.
plural rationalitiesplural rationalities
rationalrational: relating to, based on, : relating to, based on, agreeable to agreeable to reasonreason. .
reason: the power of inferring, reason: the power of inferring, comprehending, or thinking in an comprehending, or thinking in an orderly, orderly, rational rational way.way.
© K.Fedra 2000421
Decision making processesDecision making processesDecision making processesDecision making processes
plural rationalitiesplural rationalities
rationalrational: L. : L. ratio (reor, reri, ratus)ratio (reor, reri, ratus)
computation, advantage, interest,computation, advantage, interest,
behavior, procedure, ways and means, behavior, procedure, ways and means, motivation, argument, proof, opinion, motivation, argument, proof, opinion, (scientific) theory.(scientific) theory.
plural rationalitiesplural rationalities
rationalrational: L. : L. ratio (reor, reri, ratus)ratio (reor, reri, ratus)
computation, advantage, interest,computation, advantage, interest,
behavior, procedure, ways and means, behavior, procedure, ways and means, motivation, argument, proof, opinion, motivation, argument, proof, opinion, (scientific) theory.(scientific) theory.
© K.Fedra 2000422
Decision making processesDecision making processesDecision making processesDecision making processes
plural rationalitiesplural rationalities
reaching different (contradictory) reaching different (contradictory) conclusions from the same set of conclusions from the same set of premises in an internally consistent premises in an internally consistent logical way.logical way.
plural rationalitiesplural rationalities
reaching different (contradictory) reaching different (contradictory) conclusions from the same set of conclusions from the same set of premises in an internally consistent premises in an internally consistent logical way.logical way.
© K.Fedra 2000423
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• uncertaintyuncertainty
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
© K.Fedra 2000424
Decision making processesDecision making processesDecision making processesDecision making processes
Hidden agenda:Hidden agenda:Not all objectives of all actors are Not all objectives of all actors are
disclosed.disclosed.Proclaim one (popular) objective to Proclaim one (popular) objective to
reach another, different (and not reach another, different (and not disclosed, less popular or disclosed, less popular or acceptable) objective.acceptable) objective.
Hidden agenda:Hidden agenda:Not all objectives of all actors are Not all objectives of all actors are
disclosed.disclosed.Proclaim one (popular) objective to Proclaim one (popular) objective to
reach another, different (and not reach another, different (and not disclosed, less popular or disclosed, less popular or acceptable) objective.acceptable) objective.
© K.Fedra 2000425
A general DSS architectureA general DSS architectureA general DSS architectureA general DSS architecture
• Information resourcesInformation resources
• The analytical engineThe analytical engine
• The user interfaceThe user interface
• Information resourcesInformation resources
• The analytical engineThe analytical engine
• The user interfaceThe user interface
© K.Fedra 2000426
Information ResourcesInformation ResourcesInformation ResourcesInformation Resources
• information on the information on the status-quo status-quo (monitoring)(monitoring)
• background for the background for the identification or designidentification or design of decision alternativesof decision alternatives
• information on the information on the status-quo status-quo (monitoring)(monitoring)
• background for the background for the identification or designidentification or design of decision alternativesof decision alternatives
© K.Fedra 2000427
The analytical engineThe analytical engineThe analytical engineThe analytical engine
• Data base management systemData base management system
• Geographic Information SystemGeographic Information System
• Simulation and optimization modelsSimulation and optimization models
• Expert systems (rules)Expert systems (rules)
• Decision Support tools Decision Support tools properproper
• Data base management systemData base management system
• Geographic Information SystemGeographic Information System
• Simulation and optimization modelsSimulation and optimization models
• Expert systems (rules)Expert systems (rules)
• Decision Support tools Decision Support tools properproper
© K.Fedra 2000428
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface• interactive, dialogue oriented, menu interactive, dialogue oriented, menu
driven, intuitive, graphical, symbolicdriven, intuitive, graphical, symbolic• consistent syntax and semantics, consistent syntax and semantics,
layout and symbolism, intelligent, layout and symbolism, intelligent, context aware, customizedcontext aware, customized
• also includes organizational issues also includes organizational issues (e.g., for workshops, presentations, (e.g., for workshops, presentations, hearings) group dynamics, hearings) group dynamics, communicationcommunication
ALL SCIENCE IS PROPAGANDAALL SCIENCE IS PROPAGANDA (P.Feyerabend) (P.Feyerabend)
• interactive, dialogue oriented, menu interactive, dialogue oriented, menu driven, intuitive, graphical, symbolicdriven, intuitive, graphical, symbolic
• consistent syntax and semantics, consistent syntax and semantics, layout and symbolism, intelligent, layout and symbolism, intelligent, context aware, customizedcontext aware, customized
• also includes organizational issues also includes organizational issues (e.g., for workshops, presentations, (e.g., for workshops, presentations, hearings) group dynamics, hearings) group dynamics, communicationcommunication
ALL SCIENCE IS PROPAGANDAALL SCIENCE IS PROPAGANDA (P.Feyerabend) (P.Feyerabend)
© K.Fedra 2000429
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
© K.Fedra 2000430
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
© K.Fedra 2000431
Information systemsInformation systemsInformation systemsInformation systems
• provide problem contextprovide problem context
• describe available alternativesdescribe available alternatives
• offer a common language and offer a common language and shared information basis for the shared information basis for the participants in the decision making participants in the decision making processprocess
• provide problem contextprovide problem context
• describe available alternativesdescribe available alternatives
• offer a common language and offer a common language and shared information basis for the shared information basis for the participants in the decision making participants in the decision making processprocess
© K.Fedra 2000432
Information systemsInformation systemsInformation systemsInformation systems
typical application example:typical application example:
State-of-the-Environment ReportingState-of-the-Environment Reporting
decision process usually diffuse, decision process usually diffuse, multi-stage and lengthy without multi-stage and lengthy without clear technical objectives.clear technical objectives.
Public information, awareness Public information, awareness building, assists argumentation.building, assists argumentation.
typical application example:typical application example:
State-of-the-Environment ReportingState-of-the-Environment Reporting
decision process usually diffuse, decision process usually diffuse, multi-stage and lengthy without multi-stage and lengthy without clear technical objectives.clear technical objectives.
Public information, awareness Public information, awareness building, assists argumentation.building, assists argumentation.
© K.Fedra 2000433
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
© K.Fedra 2000434
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
Scenario analysisScenario analysisexplores the reaction of a system to explores the reaction of a system to
changes in the controlchanges in the control or decision or decision variables on the performance variables on the performance variables (criteria) in terms of the variables (criteria) in terms of the objectives and constraints of the objectives and constraints of the decision problem.decision problem.
Scenario analysisScenario analysisexplores the reaction of a system to explores the reaction of a system to
changes in the controlchanges in the control or decision or decision variables on the performance variables on the performance variables (criteria) in terms of the variables (criteria) in terms of the objectives and constraints of the objectives and constraints of the decision problem.decision problem.
© K.Fedra 2000435
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
Scenario Scenario from L. from L. scaenarium, scaenarium, the stagethe stage
an account or synopsis of a projected an account or synopsis of a projected
course of action or events;course of action or events;
a set of assumptions.a set of assumptions.
Scenario Scenario from L. from L. scaenarium, scaenarium, the stagethe stage
an account or synopsis of a projected an account or synopsis of a projected
course of action or events;course of action or events;
a set of assumptions.a set of assumptions.
© K.Fedra 2000436
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
typical application example:typical application example:
Environmental Impact Environmental Impact AssessmentAssessment, that evaluates and , that evaluates and compares project alternatives.compares project alternatives.
Exploratory (policy) assessment, Exploratory (policy) assessment, design of alternatives.design of alternatives.
typical application example:typical application example:
Environmental Impact Environmental Impact AssessmentAssessment, that evaluates and , that evaluates and compares project alternatives.compares project alternatives.
Exploratory (policy) assessment, Exploratory (policy) assessment, design of alternatives.design of alternatives.
© K.Fedra 2000437
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
© K.Fedra 2000438
Rational maximizationRational maximizationRational maximizationRational maximization
The individual as rational maximizerThe individual as rational maximizer
chooses a commodity bundle chooses a commodity bundle
c = (cc = (c11,...,c,...,cii,...,c,...,cn n ))
that maximizes the utilitythat maximizes the utility
u(c)u(c)
The individual as rational maximizerThe individual as rational maximizer
chooses a commodity bundle chooses a commodity bundle
c = (cc = (c11,...,c,...,cii,...,c,...,cn n ))
that maximizes the utilitythat maximizes the utility
u(c)u(c)
© K.Fedra 2000439
Rational maximizationRational maximizationRational maximizationRational maximization
maximize the utility maximize the utility u(c)u(c)– over different groups over different groups ( i )( i )– over space over space (x,y,z)(x,y,z)– over time over time ( t )( t )
maximize the utility maximize the utility u(c)u(c)– over different groups over different groups ( i )( i )– over space over space (x,y,z)(x,y,z)– over time over time ( t )( t )
© K.Fedra 2000440
Rational maximizationRational maximizationRational maximizationRational maximization
The social welfare functionThe social welfare function
u*(c) = f [uu*(c) = f [u11(c),u(c),u22(c),...,u(c),...,unn(c) ](c) ]
as the sum as the sum
iiuuii(c)(c)
of individual or group of individual or group
utility functions uutility functions uii(c)(c)
The social welfare functionThe social welfare function
u*(c) = f [uu*(c) = f [u11(c),u(c),u22(c),...,u(c),...,unn(c) ](c) ]
as the sum as the sum
iiuuii(c)(c)
of individual or group of individual or group
utility functions uutility functions uii(c)(c)
© K.Fedra 2000441
Rational choiceRational choiceRational choiceRational choice
LetLet (x,p,y) (x,p,y) denote an option where denote an option where
x x is obtained with probabilityis obtained with probability p p
yy is obtained with probability is obtained with probability 1-p 1-p
from: A.Tversky, (1977)from: A.Tversky, (1977)
On the elicitation of preferencesOn the elicitation of preferences.
LetLet (x,p,y) (x,p,y) denote an option where denote an option where
x x is obtained with probabilityis obtained with probability p p
yy is obtained with probability is obtained with probability 1-p 1-p
from: A.Tversky, (1977)from: A.Tversky, (1977)
On the elicitation of preferencesOn the elicitation of preferences.
© K.Fedra 2000442
Rational choiceRational choiceRational choiceRational choice
Assume two alternatives of Assume two alternatives of emergency management:emergency management:
AA11 50:50 to lose 100 lives 50:50 to lose 100 lives
AA22 certain to lose 45 lives certain to lose 45 lives
You can execute AYou can execute A11 OR OR A A22
What do you choose ?What do you choose ?
Assume two alternatives of Assume two alternatives of emergency management:emergency management:
AA11 50:50 to lose 100 lives 50:50 to lose 100 lives
AA22 certain to lose 45 lives certain to lose 45 lives
You can execute AYou can execute A11 OR OR A A22
What do you choose ?What do you choose ?
© K.Fedra 2000443
Rational choiceRational choiceRational choiceRational choice
AA11 50:50 to lose 100 lives 50:50 to lose 100 lives
(100, 1/2, 0)(100, 1/2, 0)
AA22 certain to lose 45 lives certain to lose 45 lives
(45)(45)
AA11 50:50 to lose 100 lives 50:50 to lose 100 lives
(100, 1/2, 0)(100, 1/2, 0)
AA22 certain to lose 45 lives certain to lose 45 lives
(45)(45)
© K.Fedra 2000448
Rational choiceRational choiceRational choiceRational choice
context dependence and bias:context dependence and bias:
certainty versus probabilitycertainty versus probability
gain versus lossgain versus loss
absolute versus relative changeabsolute versus relative change
context dependence and bias:context dependence and bias:
certainty versus probabilitycertainty versus probability
gain versus lossgain versus loss
absolute versus relative changeabsolute versus relative change
© K.Fedra 2000449
Decision makingDecision makingDecision makingDecision making
Minimax and Bayesian approaches:Minimax and Bayesian approaches:
Decision maker has:Decision maker has:
• a finite number of possible decision a finite number of possible decision alternativesalternatives
• a finite number of a finite number of outcomesoutcomes (state of nature) (state of nature)
which may have a known probability of outcomewhich may have a known probability of outcome
• a a cost or benefitcost or benefit for each decision - state-of- for each decision - state-of-
nature combinationnature combination
Minimax and Bayesian approaches:Minimax and Bayesian approaches:
Decision maker has:Decision maker has:
• a finite number of possible decision a finite number of possible decision alternativesalternatives
• a finite number of a finite number of outcomesoutcomes (state of nature) (state of nature)
which may have a known probability of outcomewhich may have a known probability of outcome
• a a cost or benefitcost or benefit for each decision - state-of- for each decision - state-of-
nature combinationnature combination
© K.Fedra 2000450
Decision makingDecision makingDecision makingDecision making
Decision Table:Decision Table:
State of NatureState of Nature
DecisionDecision rain no-rainrain no-rain
take a raincoattake a raincoat 0 0 3 3
no raincoatno raincoat 6 6 0 0(0, 3, 6, are the associated costs)(0, 3, 6, are the associated costs)
What do you do ?What do you do ?
Decision Table:Decision Table:
State of NatureState of Nature
DecisionDecision rain no-rainrain no-rain
take a raincoattake a raincoat 0 0 3 3
no raincoatno raincoat 6 6 0 0(0, 3, 6, are the associated costs)(0, 3, 6, are the associated costs)
What do you do ?What do you do ?
© K.Fedra 2000451
Decision makingDecision makingDecision makingDecision making
Decision Table:Decision Table:
State of NatureState of Nature
DecisionDecision rain no-rainrain no-rain
take a raincoattake a raincoat 0 0 3 3 ((33))
no raincoatno raincoat 6 6 0 0 (6)(6)
Minimax Solution (conservative):Minimax Solution (conservative):
take a raincoat !take a raincoat !
Decision Table:Decision Table:
State of NatureState of Nature
DecisionDecision rain no-rainrain no-rain
take a raincoattake a raincoat 0 0 3 3 ((33))
no raincoatno raincoat 6 6 0 0 (6)(6)
Minimax Solution (conservative):Minimax Solution (conservative):
take a raincoat !take a raincoat !
© K.Fedra 2000452
Decision makingDecision makingDecision makingDecision making
Decision Table: Decision Table: (with added probabilities)(with added probabilities)
State of NatureState of Nature
DecisionDecision rain rain (0.1)(0.1) no-rain no-rain (0.9)(0.9)
take a raincoattake a raincoat 0 (0) 0 (0) 3 3 (2.7)(2.7) (2.7)(2.7)
no raincoatno raincoat 6 (0.6) 6 (0.6) 0 0 (0) (0) ((0.60.6))
Bayesian Solution:Bayesian Solution:
don’t take a raincoat !don’t take a raincoat !
Decision Table: Decision Table: (with added probabilities)(with added probabilities)
State of NatureState of Nature
DecisionDecision rain rain (0.1)(0.1) no-rain no-rain (0.9)(0.9)
take a raincoattake a raincoat 0 (0) 0 (0) 3 3 (2.7)(2.7) (2.7)(2.7)
no raincoatno raincoat 6 (0.6) 6 (0.6) 0 0 (0) (0) ((0.60.6))
Bayesian Solution:Bayesian Solution:
don’t take a raincoat !don’t take a raincoat !
© K.Fedra 2000453
Decision makingDecision makingDecision makingDecision making
Decision Table:Decision Table:
States of NatureStates of Nature
DecisionDecision rain rain (0.1)(0.1) little little (0.5)(0.5) none none (0.4)(0.4)
take a raincoattake a raincoat 0 (0) 0 (0) 0 (0) 3 (1.2) 0 (0) 3 (1.2)
no raincoatno raincoat 6 (0.6) 1 (0.5) 0 (0) 6 (0.6) 1 (0.5) 0 (0)
And now ?And now ?
Decision Table:Decision Table:
States of NatureStates of Nature
DecisionDecision rain rain (0.1)(0.1) little little (0.5)(0.5) none none (0.4)(0.4)
take a raincoattake a raincoat 0 (0) 0 (0) 0 (0) 3 (1.2) 0 (0) 3 (1.2)
no raincoatno raincoat 6 (0.6) 1 (0.5) 0 (0) 6 (0.6) 1 (0.5) 0 (0)
And now ?And now ?
© K.Fedra 2000454
Decision makingDecision makingDecision makingDecision making
Decision Table:Decision Table:
States of NatureStates of Nature
DecisionDecision rain rain (0.1)(0.1) little little (0.5)(0.5) none none (0.4)(0.4)
take a raincoattake a raincoat 0 (0) 0 (0) 0 (0) 0 (0) 33 (1.2) (1.2) 1.21.2
no raincoatno raincoat 66 (0.6) 1 (0.5) 0 (0) (0.6) 1 (0.5) 0 (0) 1.11.1
MiniMaxMiniMax: : take a raincoat take a raincoat
BayesianBayesian:: take no raincoat take no raincoat
Decision Table:Decision Table:
States of NatureStates of Nature
DecisionDecision rain rain (0.1)(0.1) little little (0.5)(0.5) none none (0.4)(0.4)
take a raincoattake a raincoat 0 (0) 0 (0) 0 (0) 0 (0) 33 (1.2) (1.2) 1.21.2
no raincoatno raincoat 66 (0.6) 1 (0.5) 0 (0) (0.6) 1 (0.5) 0 (0) 1.11.1
MiniMaxMiniMax: : take a raincoat take a raincoat
BayesianBayesian:: take no raincoat take no raincoat
© K.Fedra 2000455
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
• Information systemsInformation systems
• Scenario analysisScenario analysis
WHAT IFWHAT IF
• Rational maximizationRational maximization
HOW TOHOW TO
• Multiple attributesMultiple attributes
© K.Fedra 2000456
Decision support paradigmsDecision support paradigmsDecision support paradigmsDecision support paradigms
Multiple attributesMultiple attributes
multiple objectivesmultiple objectives
multiple criteriamultiple criteria
trade-off, compromise, trade-off, compromise,
satisfaction, acceptancesatisfaction, acceptance
Multiple attributesMultiple attributes
multiple objectivesmultiple objectives
multiple criteriamultiple criteria
trade-off, compromise, trade-off, compromise,
satisfaction, acceptancesatisfaction, acceptance
© K.Fedra 2000457
Decision making processDecision making processDecision making processDecision making process
• Problem descriptionProblem description
• Set of criteriaSet of criteria– objectives– constraints
• Set of feasible alternativesSet of feasible alternatives
• Evaluation of alternativesEvaluation of alternatives
• Decision rulesDecision rules
• Problem descriptionProblem description
• Set of criteriaSet of criteria– objectives– constraints
• Set of feasible alternativesSet of feasible alternatives
• Evaluation of alternativesEvaluation of alternatives
• Decision rulesDecision rules
© K.Fedra 2000458
Decision making processDecision making processDecision making processDecision making process
SpatialSpatial decisions: decisions:
• Set of Set of criteriacriteria– objectives
– constraints
areare functions of spacefunctions of space
SpatialSpatial decisions: decisions:
• Set of Set of criteriacriteria– objectives
– constraints
areare functions of spacefunctions of space
© K.Fedra 2000459
Spatial decisionsSpatial decisionsSpatial decisionsSpatial decisions
Environmental decision are also Environmental decision are also spatial decisionsspatial decisions::
• site selection, locationsite selection, location
• pollution controlpollution control
• natural resources managementnatural resources management
• environmental impact assessmentenvironmental impact assessment
• risk analysis and managementrisk analysis and management
Environmental decision are also Environmental decision are also spatial decisionsspatial decisions::
• site selection, locationsite selection, location
• pollution controlpollution control
• natural resources managementnatural resources management
• environmental impact assessmentenvironmental impact assessment
• risk analysis and managementrisk analysis and management