Structuring Decision Problems for Decision Analysis

Topics: Decision theory, Decision making, Decision analysis Pages: 44 (7444 words) Published: April 15, 2013
CREATE Research Archive
Published Articles & Papers

1-1-1980

Structuring Decision Problems for Decision
Analysis
Detlof von Winterfeldt
University of Southern California, winterfe@usc.edu

Follow this and additional works at: http://research.create.usc.edu/published_papers Recommended Citation
von Winterfeldt, Detlof, "Structuring Decision Problems for Decision Analysis" (1980). Published Articles & Papers. Paper 35. http://research.create.usc.edu/published_papers/35

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Acta Psychologica 45 (1980) 71-93
0 North-Holland Publishing Company

STRUCTURING DECISION PROBLEMS FOR
DECISION ANALYSIS *

Detlof von WINTERFELDT **
University of Southern

California, Los Angeles, CA 90007,

USA

Structuring decision problems into a formally acceptable and manageable format is probably the most important step of decision analysis. Since presently no sound methodology for structuring exists, this step is still an art left to the intuition and craftsmanship of the individual analyst. After introducing a general concept of structuring, this paper reviews some recent advances in structuring research. These include taxonomies for problem identification and new tools such as influence diagrams and interpretative structural modeling. Two conclusions emerge from this review: structuring research is still limited to a few hierarchical concepts and it tends to ignore substantive problem aspects that delineate a problem it its real world context. Consequently structuring research has little to say about distinctions between typical problem classes such as regulation, siting, or budget allocation.

As an alternative the concept of “prototypical decision analytic structures” is introduced. Such structures are developed to meet the substantive characteristics of a specific problem (e.g., siting a specific Liquid Natural Gas plant) but they are at the same time general enough to apply to similar problems (industrial facility siting). As an illustration, the development of a prototypical analytic structure for environmental standard setting is described. Finally, some typical problem classes are examined and some requirements for prototypical structures are discussed.

An introduction to problem structuring

Decision analysis can be divided into four steps: structuring the problem; formulating inference and preference models; eliciting probabilities and utilities; and exploring the numerical model results. Prac* This research was supported by a grant from the Department of Defense and was monitored by the Engineering Psychology Programs of the Office of Naval Research, under contract # NOOO14-79C-0529. While writing this paper, the author discussed the problem of structuring extensively with Helmut Jungermann. The present version owes much to his thought. Please don’t take footnote 3 too seriously. It is part of a footnote war between Ralph Keeney and me. ** Presently with the Social Science Research Institute, University of Southern California, University Park, Los Angeles, CA 90007, (213) 741-6955.

12

D. von Winterfeldt /Structuring

decision problems

titioners of decision analysis generally agree that structuring is the most important and difficult step of the analysis. Yet, until recently, decision analytic research has all but ignored structuring, concentrating instead

on questions of modeling and elicitation. As a result, structuring was, and to some extent still is, considered the ‘art’ part of decision analysis. This paper examines some attempts to turn this art into a science. Trees are the most common decision analytic structures. Decision trees, for example, represent

the sequential
aspects of a decision
problem (see Raiffa 1968; Brown...

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