title: Making Better Decisions: Decision Theory in Practice
author:  Itzhak Gilboa 
description: The book is a modern take on decision making. The innovativescope will inspire instructors by encouraging them to include acombination rather than a subset of decision-theoretic,statistical, behavioral, and philosophical concepts in theircourses."<br />Marzena J. Rostek, University of Wisconsin
zlib_text:  
  Operations Research                                            128                                           Dr. Emad Elbeltagi 
    
   
   
  CHAPTER 5 
   
  DECISION ANALYSIS 
   
   
  Decision theory provides a framework and methodology for rational decision making. It 
  treats decisions against nature, where the result (return) from a decision depends on 
  action of another player (nature). For example, if the decision is to carry an umbrella or 
  not, the return (get wet or not) depends on what action nature takes. It is important to note 
  that, in this model, the returns accrue only to the decision maker. Nature does not care 
  what the outcome is. This condition distinguishes decision theory from game theory. In 
  game theory, both players have an interest in the outcome. 
   
  In many cases, solving your problem involves choosing among alternatives. Your 
  objective is to choose the alternative that is best, where “best” depends on what your 
  goals are. Indeed, the first rule of decision making is t