Decision Science

Balance Decision Traps with Decision Quality

Normative and Behavioral

Decision Science, an academic area of study, splits between the psychology of how people make decisions and the applied math of how to make optimal decisions. These directions are often referred to as the behavioral and normative approaches. Historically, Decision Science courses have been taught at the graduate level.

The normative approach can be thought of as purely rational, in contrast with the behavioral approach that looks descriptively at how humans practically decide, often with an emphasis on how actual human behavior departs from the normative perspective. Cognitive bias, what DEF refers to as Decision Traps (following Paul J. H. Schoemaker), are systematic errors in judgement that all humans experience to some extent. A systematic and conscious effort to recognize and compensate for these limitations is both possible and advisable. DEF material seeks to incorporate both of these incredibly rich and important approaches and to make them accessible to a general audience.

We call this a prescriptive approach.  

Given that we are human, how can we apply the insights from the behavioral and normative views to make consistently better decisions?

DEF makes a distinction between Decision Skills, when we are working with students, and Decision Quality, when the application is for adults. Both are organized around the six requirements of Decision Quality represented in the Decision Chain.

DEF's founders chose to focus on young people, since they are making significant, life-shaping decisions and have long lives ahead of them. Since young people spend significant time learning at schools, DEF naturally works to train educators in order to reach students. In turn, we found that educators appreciate Decision Quality and value it in their own lives. In the process, we have also found that administrators recognize the positive impact Decision Quality can have at the building, district and community levels.

Decision Quality is a framework originally developed by Strategic Decisions Group (SDG) that DEF has used with permission and adapted to the task at hand. DEF's philosophy and materials are aligned with fundamental principles, including the importance of attending to uncertainty with quantitative reasoning tools like probability. DEF materials are built on and extend the experience and success of these principles and tools in industry, government and academia. Many of DEF’s founders are associated with SDG, including Professor Ronald Howard of Stanford University, a seminal figure in the field of Decision Analysis.

Many major corporations have implemented DQ tools for a variety of strategic decisions, with the oil and gas and pharmaceutical industries among the pioneers, given they face big bet decisions with long development time frames and high uncertainty. In most of these organizations, one can find independent practitioners or departmental functions that support structured decision-making processes aligned with Decision Quality.

The Society of Decision Professionals promotes application of Decision Quality principles in organizations and as a profession. The Decision Analysis Society, organized within the Institute for Operations Research and Management Science (INFORMS), is distinct from, but shares many values and interests with the Decision Analysis Society. With many individuals in common, the DAS is more academically focused, while the SDP attends more to practitioners. The DAS and SDP jointly award an annual practice award. Based on a case that won this award, the Rigs to Reefs video DEF produced is an example we now use in educating young people and educators. SDP also awards the Raiffa-Howard award in honor of the work of Howard Raiffa of Harvard and Ron Howard of Stanford, who pioneered the path from Statistical Decision Theory to practical applications of Decision Analysis.

Howard Raiffa's work has been extended by his student and colleague Ralph Keeney, among others. Beyond Ralph Keeney's professional work in multi-attribute and multi-party decision making, we share a common belief in the benefits of decision analytic thinking for everyone and that "the best way to improve your quality of life is through the decisions you make". We recommend Ralph's recent book Give Yourself A Nudge as well as Smart Choices, a book previously co-authored with Raiffa and John Hammond.

Similarly, Annie Duke has added to a growing body of excellent popular books with tools for improving decision skills. We share an underlying appreciation of probabilistic thinking and quantitative aspects of decision making under uncertainty with Annie, although her books do not go to great depth on quantitative aspects of decision making. There is always a trade-off question of how far to go and what to prioritize while attending the reader's interests. There's also a question of applications. The book written by Carl Spetzler et. al. Decision Quality is more general business than personal decisions and includes decision trees.

There is lots of value in dealing with the complexity of values, the creative benefit of better alternatives, and recognizing the impact of cognitive biases on information and reasoning. DEF strives to get to a next level and we have been successful and impressed with young people when we get the chance. We remain true to and do not back away from the normative perspective, although we may have a different focus and prioritization compared with business or academia. The Decision Focus videos carry the bulk of our content that is extended with activities appropriate for high school students.

The Alliance for Decision Education shares similar interests, aiming to promote decision education, and DEF welcomes their efforts to catalyze the field. Aligned concepts, work together where there are opportunities. Bringing together a community experts in the field including Daniel Kahneman and Richard Thaler among the many luminaries on their Advisory Council helping to build a national movement for Decision Education.

The professional organization most central to the study of behavioral Decision Science is the Society of Judgement and Decision-Making. Daniel Kahneman and Amos Tversky’s collaboration was seminal in establishing the field. Kahneman was awarded the Nobel Prize in 2002 and the success of his book, Thinking Fast, Thinking Slow has spread awareness of cognitive bias in the public forum. Other Nobel Prize winning work in the area includes that of Herbert Simon (1978) and more recently, Richard Thaler (2017), author of the popular book Nudge.

When it comes to Decision Traps, we all face them all the time as part of our human condition. Forewarned is forearmed. They are a reason for humility, empathy, and resilience. A good decision can have a bad outcome - that does not change it into a bad decision. And yet, that distinction can be lost in a media looking to assign blame. Decision Traps are a motivation for pursuing Decision Education, having a decision coach and tools to support this kind of exploration like Conversations for Clarity.

DEF is really trying to get to depth in Decision Skills. That aspiration takes time and trust and proving in relationships with individuals and schools. DEF welcomes like-minded efforts, individuals, and organizations moving in a similar direction, and we are more convinced of the value than ever.

DEF has historically captured and archived materials of value to the Decision Analysis / Decision Professional Community:

DEF Events that have highlighted our work including the 20thAnniversary held at the Stanford Faculty Club.

Sound reasoning is about balancing head and heart.DEF Decision Chain poster includes the most important questions to ask yourself.