Decision Analysis and Bounded Rationality

3 credits · College of Engineering catalogue

Advisory Prerequisite: None. Enforced Prerequisite: (IOE 265 or STATS 265) and IOE 310; or graduate standing. Minimum grade requirement of “C-” for enforced prerequisite. (3 credits) This course provides a rigorous introduction to prescriptive decision analysis and more descriptive bounded rationality models. The course starts from the classic axioms of rational choice and covers single-attribute and multi-attribute utility theory, decision trees, the value of information in a decision analytic context, and expert elicitation of both probabilities and utility functions. It then introduces bounded rationality and covers some of the main classes of bounded rationality and how they can be modeled.