This course is designed to make you a better decision maker. The primary focus is on descriptive questions: how do we make judgments about the world and how do we make decisions based on these judgments. The short answer, to be developed much more completely in this course, is that although people form judgments and make decisions in a systematic fashion, their decisions are not always as optimal as possible. The emphasis on “errors” in decision making is deliberate, because all good decision makers need to know how to make effective intuitive decisions, while recognizing the limits on their intuitive skills.
Much of the class contrasts the “do” (or descriptive emphasis) with the “should” (or normative emphasis). Normative questions deal with how should we behave if we wish to behave rationally. We will discuss and identify principles of rationality, or principles which most reasonable people would like to govern their behavior. The course will move back and forth between formal, optimal methods and psychological, descriptive models to help you understand and improve your decision-making abilities. Good decision makers need to know how to recognize decision problems, how to represent the essential structure of the decision situation, and how to analyze the problem with the formal tools based on decision theory.
