Decision Analysis - DA
Categories: Financial Theory
You may have decided which college you were going to by throwing a dart, and you may have gotten married in Vegas to someone you just met at a pai gow table. But, believe it or not, there are better ways to make decisions. On the other side of the spectrum from "eloping with strangers," there's a process called "decision analysis."
DA, as you'd call it over a steak at Delmonico’s, is a formalized process for making decisions. It's basically what happens to "what should I have for dinner" when Phds in economics and game theory get involved.
Decision Analysis provides a systematic approach to making choices, attempting to use codified methods and quantitatives measures to reach an optimal solution. The goal is to take the guesswork and gut-checking out of the process.