K.Fedra ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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
• 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
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
K.Fedra ‘97
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
K.Fedra ‘97
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 ‘97
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
K.Fedra ‘97
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 generations
• 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 generations
K.Fedra ‘97
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
K.Fedra ‘97
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 ‘97
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
K.Fedra ‘97
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 ‘97
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 ‘97
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 ‘97
Decision making processesDecision making processesDecision making processesDecision making processes
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
are characterized by:are characterized by:
• multiple actorsmultiple actors
• conflicting objectivesconflicting objectives
• multiple criteriamultiple criteria
• plural rationalitiesplural rationalities
• hidden agendahidden agenda
K.Fedra ‘97
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 ‘97
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 ‘97
A general DSS architectureA general DSS architectureA general DSS architectureA general DSS architecture
data acquisition layerdata acquisition layer
graphical user interfacegraphical user interface
analyticalanalyticalengineengine
modelsmodelsexpert expert systemsystem
DBMSDBMSGISGIS
K.Fedra ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
User interface characteristicsUser interface characteristicsUser interface characteristicsUser interface characteristics
• IntegrationIntegration
• InteractionInteraction
• VisualizationVisualization
• IntelligenceIntelligence
• CustomizationCustomization
• IntegrationIntegration
• InteractionInteraction
• VisualizationVisualization
• IntelligenceIntelligence
• CustomizationCustomization
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• provides integration of functionsprovides integration of functions• interactive, dialogue oriented, interactive, dialogue oriented,
menu drivenmenu driven• intuitive, graphical, symbolicintuitive, graphical, symbolic• consistent syntax and semantics, consistent syntax and semantics,
layout and symbolismlayout and symbolism• intelligent, context awareintelligent, context aware• customizedcustomized
• provides integration of functionsprovides integration of functions• interactive, dialogue oriented, interactive, dialogue oriented,
menu drivenmenu driven• intuitive, graphical, symbolicintuitive, graphical, symbolic• consistent syntax and semantics, consistent syntax and semantics,
layout and symbolismlayout and symbolism• intelligent, context awareintelligent, context aware• customizedcustomized
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• provides integration of functionsprovides integration of functionsshould provide access to should provide access to ALLALL
systems functions and resources.:systems functions and resources.: seamless integration.seamless integration.
For the non-technical user, the user For the non-technical user, the user interface interface ISIS the system. the system.
• provides integration of functionsprovides integration of functionsshould provide access to should provide access to ALLALL
systems functions and resources.:systems functions and resources.: seamless integration.seamless integration.
For the non-technical user, the user For the non-technical user, the user interface interface ISIS the system. the system.
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• interactive dialogue, menu driveninteractive dialogue, menu drivenmodeled after the dialogue with a modeled after the dialogue with a
human experthuman expertimmediate responseimmediate responseincremental problem definitionsincremental problem definitionsincremental detail of answersincremental detail of answersparaphrasing, explanation,paraphrasing, explanation,analogiesanalogies
• interactive dialogue, menu driveninteractive dialogue, menu drivenmodeled after the dialogue with a modeled after the dialogue with a
human experthuman expertimmediate responseimmediate responseincremental problem definitionsincremental problem definitionsincremental detail of answersincremental detail of answersparaphrasing, explanation,paraphrasing, explanation,analogiesanalogies
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• intuitive, graphical, symbolicintuitive, graphical, symbolic
intuitively understandable formatsintuitively understandable formatsgraphical representation of complex graphical representation of complex
and large data volumesand large data volumessymbolic representation of abstract symbolic representation of abstract
concepts concepts
• intuitive, graphical, symbolicintuitive, graphical, symbolic
intuitively understandable formatsintuitively understandable formatsgraphical representation of complex graphical representation of complex
and large data volumesand large data volumessymbolic representation of abstract symbolic representation of abstract
concepts concepts
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• consistent syntax and semantics, consistent syntax and semantics, layout and symbolismlayout and symbolism
ease-of-use through familiarityease-of-use through familiarityeasy orientationeasy orientationfast learningfast learning
• consistent syntax and semantics, consistent syntax and semantics, layout and symbolismlayout and symbolism
ease-of-use through familiarityease-of-use through familiarityeasy orientationeasy orientationfast learningfast learning
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• intelligent, context awareintelligent, context aware
built-in information about the built-in information about the application domainapplication domain
information about data availabilityinformation about data availabilityinformation about the userinformation about the useradaptive behaviour, learningadaptive behaviour, learning
• intelligent, context awareintelligent, context aware
built-in information about the built-in information about the application domainapplication domain
information about data availabilityinformation about data availabilityinformation about the userinformation about the useradaptive behaviour, learningadaptive behaviour, learning
K.Fedra ‘97
The User InterfaceThe User InterfaceThe User InterfaceThe User Interface
• customizedcustomized
uses the language, jargon, style, etc. uses the language, jargon, style, etc. of the end userof the end user
simulates familiar structures and simulates familiar structures and formats of informationformats of information
It is easier to change software than It is easier to change software than institutions and habits.institutions and habits.
• customizedcustomized
uses the language, jargon, style, etc. uses the language, jargon, style, etc. of the end userof the end user
simulates familiar structures and simulates familiar structures and formats of informationformats of information
It is easier to change software than It is easier to change software than institutions and habits.institutions and habits.
K.Fedra ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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 ‘97
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