Decision Analysis Books

“A popular misconception is that decision analysis is unemotional, dehumanizing, and obsessive because it uses numbers and arithmetic in order to guide important life decisions. Isn’t this turning over important human decisions “to a machine,” sometimes literally a computer — which now picks our quarterbacks, our chief executive officers, and even our lovers? Aren’t the “mathematicizers” of life, who admittedly have done well in the basic sciences, moving into a context where such uses of numbers are irrelevant and irreverent? Don’t we suffer enough from the tyranny of numbers when our opportunities in life are controlled by numerical scores on aptitude tests and numbers entered on rating forms by interviewers and supervisors? In short, isn’t the human spirit better expressed by intuitive choices than by analytic number crunching?

Our answer to all these concerns is an unqualified “no.” There is absolutely nothing in the von Neumann and Morgenstern theory — or in this book — that requires the adoption of “inhumanly” stable or easily accessed values. In fact, the whole idea of utility is that it provides a measure of what is truly personally important to individuals reaching decisions. As presented here, the aim of analyzing expected utility is to help us achieve what is really important to us. As James March (1978) points out, one goal in life may be to discover what our values are. That goal might require action that is playful, or even arbitrary. Does such action violate the dictates of either rationality or expected utility theory? No. Upon examination, an individual valuing such an approach will be found to have a utility associated with the existential experimentation that follows from it. All that the decision analyst does is help to make this value explicit so that the individual can understand it and incorporate it into action in a noncontradictory manner.”
― Reid Hastie, Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making