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Making Hard Decisions – Robert T.Clemen

cult situations that we may not have anticipated. In either case, establishing the precise
nature of the decision situation (which we will later call the decision context) goes
hand in hand with identifying and understanding one’s objectives in that situation.

With the decision situation and pertinent objectives established, we turn to the dis-
covery and creation of alternatives. Often a careful examination and analysis of objec-
tives can reveal alternatives that were not obvious at the outset. This is an important

benefit of a decision-analysis approach. In addition, research in the area of creativity has
led to a number of techniques that can improve the chance of finding new alternatives.
The next two steps, which might be called “modeling and solution,” form the heart
of most textbooks on decision analysis, including this one. Much of this book will

focus on decomposing problems to understand their structures and measure uncer-
tainty and value; indeed, decomposition is the key to decision analysis. The approach

is to “divide and conquer.” The first level of decomposition calls for structuring the

problem in smaller and more manageable pieces. Subsequent decomposition by the de-
cision maker may entail careful consideration of elements of uncertainty in different

parts of the problem or careful thought about different aspects of the objectives.

Description

What makes decisions hard? Certainly different problems may involve different and
often special difficulties. For example, the ODA’s problem requires it to think about
the interests of various groups as well as to consider only limited information on the
possible effects of the sprays. Although every decision may have its own special
problems, there are four basic sources of difficulty. A decision-analysis approach can
help a decision maker with all four.
First, a decision can be hard simply because of its complexity. In the case of the

gypsy moths, the ODA must consider many different individual issues: the uncer-
tainty surrounding the different sprays, the values held by different community

groups, the different possible courses of action, the economic impact of any pest-
control program, and so on. Simply keeping all of the issues in mind at one time is

nearly impossible. Decision analysis provides effective methods for organizing a

complex problem into a structure that can be analyzed. In particular, elements of a de-
cision’s structure include the possible courses of action, the possible outcomes that

could result, the likelihood of those outcomes, and eventual consequences (e.g., costs
and benefits) to be derived from the different outcomes. Structuring tools that we will

consider include decision trees and influence diagrams as well as procedures for ana-
lyzing these structures to find solutions and for answering “what if” questions.

Second, a decision can be difficult because of the inherent uncertainty in the situa-
tion. In the gypsy moth case, the major uncertainties are the effectiveness of the differ-
ent sprays in reducing the moth population and their potential for detrimental ecologi-
cal and health effects. In some decisions the main issue is uncertainty. For example,

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