MS&E 252 Decision Analysis I course in Stanford - an organized approach to decision analysis

Sunday, July 1, 2012

An year before I took the MS&E 252 Decision Analysis course in Stanford, thought it would be worthwhile to share how important a formal decision analysis process is in making better decisions and how much difference a course on the same would make.

Well, the primary reason I took this course is mainly because the term 'Decision Analysis' appealed me to an extent and was I also keen to improve my decision making skills. Based on what I learnt, clearly this course impressed me.

The field decision analysis is coined by Prof Ronald A. Howard and it was a privilege to attend a class instructed by him. Decision analysis is all about dealing with uncertain events. The main takeaway from this course for me was, to make better decisions, you need to assign probabilities to different uncertain events based on your knowledge/belief about those events and apply some techniques based on those probabilities to arrive at a decision. The course also helped me to to greatly simplify probability problems through decision trees, something which has practical applications.

Never before I fully realized the power of probabilities in decision analysis till I took this course and after taking this course my approach towards decision analysis was much more organized, always taking into account the important decision analysis principles I learnt through this course. I still remember a situation where I got instant benefit from this course through the application of the sunk cost principle in one my decisions which I was delaying for a while and I am glad that I did apply that principle.

Finally coming to an important question: How much will a course help you make better decisions? Clearly depends on your willingness to go through a process for analyzing decisions, my belief is that if you go through that process, over a period of time your probabilities towards uncertain events will be more realistic and may result in better application of the decision analysis techniques to get close to best results.

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