The course and the book
How do people make decisions? What do people consider when they make decisions? What analytical or mathematical models are there that people can use when they make decisions? What are some examples of applied decision making, and what can we learn from those examples?
I have spent decades researching, studying, using, and teaching about decision theory and decision making. It’s my sincere pleasure to teach courses at the undergrad and graduate level to my students at William & Mary, and during those courses I attempt to answer the questions I have posed above. I use the book I wrote myself, Making Decisions: Analytics, Cognition, and Application, published by Cambridge University Press.
In the book and in the course, I cover three approaches to decision theory and decision making:
1) Analytics and Mathematical Models for Optimum Decision Making: Many of the decisions people make can actually be modeled and the optimum solutions determined. One method for making decisions is the use of decision trees – which break out a multi-stage decision into a sequence of acts, events, and outcomes. There are several decision strategies that can be utilized depending on the goals of the decision maker – and each of these strategies can be calculated with basic math and probability. One strategy is avoiding the worst-case outcome. Another is achieving the highest payoff – even if that exposes the decision maker to a potential loss. A third is to achieve the highest long-term payoff through multiple cycles. It is also possible to calculate the value of information and determine how much we should be willing to pay to move from risk to certainty. The first section of the course and the book give students a clear understanding of the analytical and mathematical models available to them to make optimum decisions.
2) Cognitive Aspects of Decision Making: Recent decades have seen great progress in understanding and explaining the cognitive processes people go through when they make decisions. People use heuristics – quick rules of thumb – when they make decisions. When making decisions, people tend to focus more on comparison or change, than on absolute numbers. People make decisions based on their memories – but with all the biases and frailties of memories. Decisions can often be influenced by the wording or way the decision is framed. The growing field of Behavioral Economics links Psychology and Economics to explains and predicts human decision making. The second section of the course and the book cover the descriptive cognitive and behavioral models of decision theory.
3) Applied Decision Theory: Students who enroll in my courses on decision theory are interested in learning about the mathematical models and cognitive explanations of decision making, but I find that what interests them most is the application of what they have learned to real-world decisions they face. The third section of the book and the course focus on applications, examples, and selected topics. We discuss Signal Detection Theory as a way to explain when to take action and when not to. We discuss how game theory can be an informative model for the making of decisions when the decisions are part of two-person or multi-person interactions. Decision making under stress and decision making in disputes or conflicts are topics that can make people uncomfortable, but my students realize they would rather be prepared, than to go into such situations with no understanding of the dynamics. The topic that seems to interest students most is dealing with indecisiveness. When I ask them on the first day of class why they enrolled in this course, they often express a wish to deal with their own indecisiveness. This is a topic we cover thoroughly – and they tell me their confidence improves with their understanding.
Syllabi and PowerPoints
I am happy to share here some of the syllabi I have recently used and also the PowerPoints I have developed. I do this for two reasons.
Professors who have adopted the book are welcome to repurpose my syllabi for their own classes. Yes, you are welcome to copy/paste/reuse/edit as may be helpful to you. Same for my PowerPoints. Please note that neither the syllabi nor PowerPoints come with any guarantee or waranty. Although these are the syllabi and PowerPoints I use, it is up to you to verify and check all aspects of the Syllabi and PowerPoints. Click here to download my PowerPoints. Click to download my recent syllabi for the undergrad version or the grad version.
Students who take my courses will already find these same resources on our BlackBoard site, but for those who are not yet enrolled and are considering taking the course, this will provide you with a sense of what we will cover.
Exams
I am happy to share here some of the syllabi I have recently used and also the PowerPoints I have developed. I do this for two reasons.
Professors who have adopted the book are welcome to repurpose my syllabi for their own classes. Yes, you are welcome to copy/paste/reuse/edit as may be helpful to you. Same for my PowerPoints. Please note that neither the syllabi nor PowerPoints come with any guarantee or waranty. Although these are the syllabi and PowerPoints I use, it is up to you to verify and check all aspects of the Syllabi and PowerPoints. Click here to download my PowerPoints. Click to download my recent syllabi for the undergrad version or the grad version.
Students who take my courses will already find these same resources on our BlackBoard site, but for those who are not yet enrolled and are considering taking the course, this will provide you with a sense of what we will cover.
Professors who would like to be sent copies of the exams I have used – with answers provided – are asked please to email to me directly at hjlang@wm.edu. Please be sure to provide me with your verifiable institutional email address where you are a professor.