Mod 3/2
A. Introduction
A.1 Incrementalism
A.2 Focused Trial and Error
A.3 Tentativeness
A.4 Procrastination
A.5 Decision Staggering
A.6 Fractionalizing
A.7 Hedging Bets
A.8 Maintaining Strategic Reserves
A.9 Reversible Decisions
“Humble Decision Making” Etzioni Chapter 3
“Risk Analysis” Dickson Chapter 8
Mod 3/2
A. Introduction
B. The Meaning of Probabilities
C. Derivation of Probabilities
C.1 A Priori
C.2 Relative Frequency
C.3 Subjective
D. Combining Probabilities
D.1 Alternative Events
D.2 Joint Events
D.3 Probability Trees
E. Probability Distributions
E.1 Discrete and Continuous Variables
E.2 Actual and Theoretical Distributions
F. The Normal Distribution
F.1 Using the Normal Distribution
G. Binomial Distribution
Kelly, P. (2007) Risk Decisions, Unit 1
Mod 3/1
A. A Beginning
B. Decision Making Theory and Models
C. Decision Making Strategies – An Introduction
C.1 Activity – Reading and Reflecting
1 Framing Risk Management Problems – Common Elements
2 Time Horizons
3 Externalities
4 Data Credibility
5 Interdependencies
6 Uncertainty Recognition
7 Measurement of Costs and Benefits
“Probability”, Dickson Chapter 8
Mod 3/1
A. Introduction
B. The Meaning of Probabilities
C. Derivation of Probabilities
C.1 A Priori
C.2 Relative Frequency
C.3 Subjective
D. Combining Probabilities
D.1 Alternative Events
D.2 Joint Events
D.3 Probability Trees
E. Probability Distributions
E.1 Discrete and Continuous Variables
E.2 Actual and Theoretical Distributions
F. The Normal Distribution
F.1 Using the Normal Distribution
G. Binomial Distribution
“Risk Analysis”, Dickson Chapter 1
Mod 3/1
A. Introduction
B. The Nature of Risk Analysis
B.1 Risk and Human Behaviour
B.2 Risk Analysis Methodology
B.3 Statistical Analysis
C. The Risk Management Standard
C.1 Risk Identification
C.2 Risk Description
C.3 Risk Estimation
C.4 Risk Analysis Methods and Techniques
C.5 Risk Profile
D. The Cost of Risk
D.1 The Cost to Individuals
D.2 The Costs to the Country
E. The Cost of Risk Analysis
F. Conclusion
1.1 Drucker, et al. (2001) The Effective Decision Chapter 1, Harvard Business Review
Paper Outline
A. Introduction
B. Sequential Steps
C. The Classification
D. The Definition
E. The Specifications
F. The Decision
G. The Action
H. The Feedback
I. Concluding Note
7 Deadly Sins – Illusory Correlation
Or ‘magical thinking’ as Massimo Piattelli-Palmarini calls it. This is about making positive correlations even though the supporting data is weak. Sometimes we notice only data that supports our hypothesis and ignore data that doesn’t.
An example of magical thinking goes like this. We come across a few people who exhibit a certain symptom and also a certain illness, and we associate that symptom with the illness, such that if we see that symptom, then we decide that the illness is also present.
You see someone with red spots, and you diagnose measles.
We forget that sometimes the same symptom appears for a different illnes. Or the illness is present without that symptom.
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