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| Preface | |
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| Acknowledgments | |
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| Authors | |
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| Structuring Hard Decisions | |
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| The Case for a Structured Analytic Decision Process | |
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| Goal and Overview | |
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| The Challenge | |
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| Decision Analysis Effectiveness | |
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| Do Not Trust Your Gut | |
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| Maximize versus Satisfice | |
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| Established Biases | |
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| What Makes a Decision Difficult? | |
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| Symptoms of a Poor Decision-Making Process | |
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| Transparent and Efficient Decision Making | |
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| Other Modeling Tools | |
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| Probabilistic Models | |
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| Deterministic Models | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Discuss the Factors That Made the Following Decisions Difficult | |
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| References | |
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| Influence Diagrams: Framing Multi-Objective and Uncertain Decisions | |
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| Goal and Overview | |
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| Components of an Influence Diagram | |
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| Learn by Simple Example: Automation Investment | |
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| Divide and Delay Decision: Plan an RSVP Theater Party | |
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| Arrows in Complex Influence Diagram: New Product Late-to-Market | |
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| Multiple Objective Influence Diagram: Buying a Used Car | |
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| Oglethorpe Power Corporation: Actual Case | |
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| Influence Diagram Construction: Review | |
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| Solving Influence Diagrams | |
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| Recent Articles on Influence Diagrams | |
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| Exercises | |
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| References | |
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| Common Decision Templates | |
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| Goal and Overview | |
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| In-House or Outsource (Make or Buy) | |
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| Change (Upgrade) or Keep Status Quo | |
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| Products: Launch, Portfolios, and Project Management | |
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| Project Management: Product Development | |
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| Capacity Planning | |
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| Technology Choice | |
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| Personnel and Organizational Selection: Hire Faculty | |
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| Facility Location: Sports Arena | |
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| Bidding: Make Offer | |
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| Personal: University Selection | |
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| Information Gathering: Market Research, Prototypes, and Pilot Plants | |
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| Summary | |
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| Exercises | |
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| References | |
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| Decisions with Multiple Objectives | |
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| Structure Decisions with Multiple Objectives | |
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| Goal and Overview | |
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| Description of the Overall MAUT Process | |
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| Basic Terminology | |
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| Fundamental Objectives | |
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| Objectives Hierarchy: Examples | |
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| Top-Down Approach: Global Facility Location | |
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| Bottom-Up Approach: Kitchen Remodeling | |
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| Measures | |
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| Example: Buy a Used Car | |
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| Identify Alternatives | |
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| Real-World Applications | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Cases | |
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| References | |
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| Structured Trade-Offs for Multiple Objective Decisions: Multi-Attribute Utility Theory | |
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| Goal and Overview | |
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| Concepts and Terminology | |
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| Compare Alternatives | |
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| Trade-Off Conflicting Objectives | |
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| Single-Measure Utility Function: Proportional Scores | |
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| Aggregate Utility: Total Score for Each Alternative | |
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| Assessing Weights Revisited: Large Set of Measures | |
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| Assess Individual (Single-Measure) Utility Function: Nonlinear Utility Functions and Constructed Measures | |
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| Group Decision Making | |
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| Uncertainty | |
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| Contractor Selection for Kitchen Remodeling | |
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| Real-World Application: Multi-Attribute Risk Analysis in Nuclear Emergency Management | |
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| Selection of Best Conformal Coating Process | |
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| Nonlinear Additivity: Multiplicative Form | |
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| Research Issues with Weight Elicitation | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Cases | |
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| Background Information | |
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| References | |
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| Value and Risk Management for Multi-Objective Decisions | |
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| Goal and Overview | |
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| Synthesize Weighted Sum | |
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| Comparison of Two Alternatives | |
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| Robustness of a Decision Using Sensitivity Analysis | |
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| Value Enhancement with Hybrid: Lighting Example | |
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| Better Alternative through Value Enhancement: Kitchen Remodeling | |
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| Value Enhancement: Warehouse Selection | |
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| Value Enhancement and Risk Management: Process Selection | |
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| Risk Analysis and Management | |
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| MAUT and Subject Matter Experts: Process | |
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| Applications | |
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| Exercises | |
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| References | |
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| Multiple Objective Decisions with Limited Data: Analytical Hierarchy Process | |
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| Goal and Overview | |
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| AHP Procedure Details and Snow Blower Example | |
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| Commercial Snow Throwers Selection | |
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| Select a Job | |
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| Software Selection | |
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| Growth of AHP Pair-Wise Comparison Effort | |
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| Comparison of AHP vs. MAUT | |
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| Application Capsule: Compare AHP with MAUT: A Case Study | |
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| Consistency Ratio | |
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| Consistency Measurement | |
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| Exercises | |
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| References | |
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| Decisions and Management under Uncertainty | |
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| Value-Added Risk Management Framework and Strategies | |
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| Goal and Overview | |
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| Overview of the Risk Management Process | |
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| Risk Identification | |
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| Risk Quantification | |
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| Systems Risk Analysis | |
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| Risk Mitigation Framework | |
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| Risk Communication, Perception, and Awareness | |
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| Alternative Risk Mitigation and Elimination Strategies | |
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| Exercises | |
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| References | |
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| Spreadsheet Simulation for Decisions with Uncertainty | |
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| Goal and Overview | |
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| Using @Risk Spreadsheet Simulation | |
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| Project Acceleration Investment | |
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| Profit Forecasting for Drug Development | |
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| Global Sourcing Risk Analysis | |
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| Real-World Applications @Risk | |
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| Exercises | |
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| References | |
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| Decisions with Uncertainty: Decision Trees | |
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| Goal and Overview | |
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| Early Users of Decision Trees | |
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| Concepts | |
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| Influence Diagrams and Schematic Trees | |
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| Constructing and Analyzing a Simple Decision Tree | |
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| Risk Profile/Cumulative Risk Profile | |
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| Complex Symmetric Decision Tree: Make or Buy | |
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| Asymmetric Tree: Design Change | |
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| Sequential Decisions | |
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| Robustness of Optimal Solution through Sensitivity Analysis | |
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| Real World Applications | |
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| Basic Terminology/Glossary of Terms | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Decision Tree Examples | |
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| Decision Trees: Cases | |
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| References | |
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| Structured Risk Management and the Value of Information and Delay | |
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| Goal and Overview | |
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| Identify High-Impact Variables | |
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| Risk Profiles and Structured Risk Management | |
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| Make or Buy Example: Discrete Decision Tree Analysis | |
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| Perfect and Imperfect Information | |
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| Imperfect Information: Bayes' Theorem | |
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| Conditional Decisions and Information Seeking Trees: Flu Virus Detection Technology | |
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| Contingent Contracts Reduce Risk | |
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| Real Options | |
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| Exercises | |
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| References | |
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| Risk Attitude and Utility Theory | |
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| Goals and Overview | |
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| Utility Theory: Concepts and Terminology | |
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| Utility Function Assessment | |
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| Change the Risk Equation: Insurance and Risk Sharing | |
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| Case Study: Phillips Petroleum and Onshore U.S. Oil Exploration | |
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| Utility Theory: Practical and Theoretical Challenges | |
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| Current Research in Utility Theory | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Utility Theory Examples | |
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| References | |
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| Challenges to "Rational" Decisions | |
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| Forecast Bias and Expert Interviews | |
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| Goals and Overview | |
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| Motivational and Personal Biases | |
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| Point Estimate and Narrow Ranges: Overconfidence | |
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| Faulty Probability Reasoning | |
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| Availability and Representativeness: | |
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| Confirmation and Interpretation Bias | |
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| Expert Interview: How to Identify and Reduce Bias | |
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| Research into Probabilistic Forecasts | |
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| Phrases: Bad Alternative to Actual Quantification | |
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| Exercises | |
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| Complete Chapter Activities | |
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| References | |
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| Decision Bias | |
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| Goal and Overview | |
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| Sunk Cost and Escalation of Commitment | |
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| Framing Bias | |
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| Status Quo and Omission Bias | |
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| Regret | |
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| Fairness | |
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| Mood | |
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| Groupthink, Optimism, and Miscellaneous Biases | |
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| Exercises | |
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| Complete Chapter Activities | |
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| References | |
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| Decisions with Multiple Perspectives | |
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| Value-Added Negotiations | |
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| Goal and Overview | |
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| Understanding Negotiations | |
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| Challenges to Effective Negotiation | |
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| Managing the Negotiation Process | |
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| Negotiating a Deal | |
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| Negotiating a Dispute | |
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| Agents and Multiparty Negotiations | |
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| Negotiating across Border | |
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| Negotiating Ethically | |
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| Conclusion | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Additional Exercises | |
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| References | |
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| Ethical Decisions | |
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| Goal and Overview | |
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| Ethical Decision-Making Framework | |
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| Values | |
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| Biases, Myopia, and Don't Want to Know | |
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| Pressures Undermine Ethical Balance | |
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| Short Cases | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Case | |
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| Alternatives | |
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| Whistle Blowing/Speaking Out | |
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| References | |
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| Strategic Direction, Planning, and Decision Making | |
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| Goal and Overview | |
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| Strategic Planning | |
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| Elements of Strategic Decisions | |
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| Situation Assessment: SWOT Analysis | |
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| Basic Tools: Decision Hierarchy and Strategy Table | |
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| Strategy Development Steps for Large Organizations | |
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| Scenario Planning | |
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| Exercises | |
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| Complete Chapter Activities | |
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| Elements of Scenario Planning Trends and Uncertainties | |
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| References | |
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| Instructions for Downloading the DecisionTools Suite | |
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| Instructions for Downloading Logical Decisions | |
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| Index | |