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Decision making

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Blinky

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I would like to ask you whether you know some good books about decision making (or managerial decision making or theory of games). I have read Thinking and Deciding by Jonathan Baron and I have Choices, Values and Frames by Tversky and Kahneman borrowed so it would be great if you can recommend me something more. It´s really interesting subject and I want to know more about it.

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  • 2 weeks later...

If you have a sense of humor: I've found both Sun Tzu Was a Sissy and Morton/Whitten's Secrets of the SuperOptimist to be two unexpectely permanent additions in my collection.

The first deals more with management and decision-making, and the SuperOptimist book speaks more generally to steering any negative situation to your own benefit.

Both present themselves as parody, and they do succeed (big time) in making you laugh, but SuperOptimist in particular has a fleshed-out vision underneath the jokes that I found myself strongly attracted to. In any case I definitely think it honed my sense for success just a little further. I recommend them both.

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I can make some fantastic recommendations on game theory books. I have not read it myself, but John Maynard Smith's Evolution and the Theory of Games is supposed to be a classic book on evolutionary game theory. If you are interested in books that are mathematical (or just what an Economic and Decision Analysis course would use) please let me know. I can make plenty of additional recommendations. After all, I am aspiring to become a professor of Operations Research, the science of applying rigorous mathematics, statistics and computer science to making better decisions for real-world problems.

With regards to managerial decision making, perhaps a good place to start would be to read the books of some great CEOs or capitalists in recent history. Retired CEO superstar Jack Welch has recently been a very prolific writer on this subject. In addition, Warren Buffett has also written a series of essays for corporate america.

I hope that this helps!

Edited by DarkWaters
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Thank for recommendations both of you.

To Sayn: I have a sense of humor but I was rather interested in some more scientific works.

To Dark Waters: I have already ordered Games and Decisions by Luce and Raiffa, I hope it will be good. But after reading it I will consider buying Smith´s book. It looks well and I am quite interested in evolutionary theory too, so I might like it. Have you read Welch or Buffet yourself? Isn´t Welch one of those authors of self-help books that does not help anyone at all? (I am not sure whether I wrote what I wanted clearly - I mean that there are many books that gives many easy advices that in fact don´t help at all - basicly books that aren´t backed up by facts...). Anyway I will have a look at them. I think, that I have seen some of them even translated to czech so it might be easier for me to obtain them. Have you read My Years with General Motors by Sloan? I wonder whether it is worth reading. Finally, don´t you know some book about decision making from the view of psychology? I am mostly interested in psychology, so I am primarily looking for some of them.

I will maybe ask you later for some other recommendations, you seem to be a valuable source. Thx a lot.

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To Dark Waters: I have already ordered Games and Decisions by Luce and Raiffa, I hope it will be good.

Although I am not familiar with this specific textbook, it looks like a decent place to start. If you have any specific technical questions, you are welcome to ask me. I happen to like combinatorial games.

But after reading it I will consider buying Smith´s book. It looks well and I am quite interested in evolutionary theory too, so I might like it.

You might also enjoy Richard Dawkins' The Selfish Gene, which has an implicit discussion of game theory in the context of hereditary genetics and evolution. I have read this and I remember enjoying it.

Have you read Welch or Buffet yourself? Isn´t Welch one of those authors of self-help books that does not help anyone at all? (I am not sure whether I wrote what I wanted clearly - I mean that there are many books that gives many easy advices that in fact don´t help at all - basicly books that aren´t backed up by facts...).

I have not read anything by either of these authors. I suspect that the essays by Warren Buffett are particularly good given that they are not mass-marketed to anyone who wants to amass a fortune overnight. My suggestion on these two individuals was more intended to recommend learning about individuals who have amassed great fortunes through decision making. I just finished a pretty good biography on Warren Buffett by Roger Lowenstein.

Jack Welch is most notable for increasing the market capitalization of General Electric by over $400 billion during his time as the company's CEO. Lately, he has been writing lots of books on management which are intended for a broad audience. These might not be so interesting for you. I think his autobiography might be interesting to read as another example of someone who has generated a legendary amount of wealth through bold decision making.

However, if you are more interested in decision modeling, then the game theoretic route might be a better reading path to choose.

Have you read My Years with General Motors by Sloan?
I have not.

Finally, don´t you know some book about decision making from the view of psychology?

Not especially, although I know that my undergraduate university has a department of Social and Decision Sciences and has a track of study called Decision Science. Perhaps you might want to browse that website and see what the students are reading?

I can recommend some books if you wish to read about irrationality. As an undergraduate, I completed a course on Individual and Collective Irrationality from this department. I can easily say that this was the best humanities course that I have taken from a university.

In my personal opinion, I find the models from Operations Research and Economic Decision Analysis to be more interesting and more useful as they would encapsulate any valuble decision-making protocols from cognitive psychology but supplement them with rigorous analytical techniques that (if properly used) help individuals better perceive reality. Needless to say, I am biased given my choice in academic pursuit.

Thx a lot.

Sure!

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You might also enjoy Richard Dawkins' The Selfish Gene, which has an implicit discussion of game theory in the context of hereditary genetics and evolution. I have read this and I remember enjoying it.

I have read it and enjoyed it very much. I love Dawkins' books, I have read nearly all of them.

I have not read anything by either of these authors. I suspect that the essays by Warren Buffett are particularly good given that they are not mass-marketed to anyone who wants to amass a fortune overnight. My suggestion on these two individuals was more intended to recommend learning about individuals who have amassed great fortunes through decision making. I just finished a pretty good biography on Warren Buffett by Roger Lowenstein.

Jack Welch is most notable for increasing the market capitalization of General Electric by over $400 billion during his time as the company's CEO. Lately, he has been writing lots of books on management which are intended for a broad audience. These might not be so interesting for you. I think his autobiography might be interesting to read as another example of someone who has generated a legendary amount of wealth through bold decision making.

I´ll have a look at them. Thx.

Not especially, although I know that my undergraduate university has a department of Social and Decision Sciences and has a track of study called Decision Science. Perhaps you might want to browse that website and see what the students are reading?

Thx for a link, it seems that I can find some information there.

I can recommend some books if you wish to read about irrationality. As an undergraduate, I completed a course on Individual and Collective Irrationality from this department. I can easily say that this was the best humanities course that I have taken from a university.

I will be grateful if you recommend me some. It sounds interesting.

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Thank for recommendations both of you.

To Sayn: I have a sense of humor but I was rather interested in some more scientific works.

To Dark Waters: I have already ordered Games and Decisions by Luce and Raiffa, I hope it will be good. But after reading it I will consider buying Smith´s book. It looks well and I am quite interested in evolutionary theory too, so I might like it. Have you read Welch or Buffet yourself? Isn´t Welch one of those authors of self-help books that does not help anyone at all? (I am not sure whether I wrote what I wanted clearly - I mean that there are many books that gives many easy advices that in fact don´t help at all - basicly books that aren´t backed up by facts...). Anyway I will have a look at them. I think, that I have seen some of them even translated to czech so it might be easier for me to obtain them. Have you read My Years with General Motors by Sloan? I wonder whether it is worth reading. Finally, don´t you know some book about decision making from the view of psychology? I am mostly interested in psychology, so I am primarily looking for some of them.

I will maybe ask you later for some other recommendations, you seem to be a valuable source. Thx a lot.

If you're interested in books on the pscyhology of decision making then Welch and Sloan are not as helpful. When you say "managerial" decision making recognize that you are now encompassing a very broad field that includes many aspects of business theory and practice, not just the pure science of making decisions. I've read Sloan and Welch and probably not what you are looking for. They might give you empirical examples of such decisions, but the topics themselves are something different.

You probably want some pure economics texts, such as the ones referencing on game theory or utility theory. Something that focuses on the basis psychological components of individual trading decisions.

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Another thought that came to me is to search an academic business journal for articles with "decision making" or "strategic decision" in them. You could then trace the article back to more academic articles specifically around the psychology of decision making. Many times these articles will have both discussion of broader business application, but also the "science" behind the concepts.

For business, the de facto standard is the Harvard Business Review. Their article database is searchable, and you can buy individual reprints of articles.

Edited by KendallJ
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If you're interested in books on the pscyhology of decision making then Welch and Sloan are not as helpful. When you say "managerial" decision making recognize that you are now encompassing a very broad field that includes many aspects of business theory and practice, not just the pure science of making decisions. I've read Sloan and Welch and probably not what you are looking for. They might give you empirical examples of such decisions, but the topics themselves are something different.

You probably want some pure economics texts, such as the ones referencing on game theory or utility theory. Something that focuses on the basis psychological components of individual trading decisions.

I am interested in decision making in general - I want to understand it thoroughly, from various prespectives. So I am interested in game theory, managerial decision making, psychology of decision mking etc. Nevertheless I am more interested in theory than in practice, so I guess that Sloan and Welch want be exactly what I am looking for. But I will have a look at them anyway, I might find something useful in them anyway.

Another thought that came to me is to search an academic business journal for articles with "decision making" or "strategic decision" in them. You could then trace the article back to more academic articles specifically around the psychology of decision making. Many times these articles will have both discussion of broader business application, but also the "science" behind the concepts.

For business, the de facto standard is the Harvard Business Review. Their article database is searchable, and you can buy individual reprints of articles.

I will give it a try too. I have an access to some databases of articles thanks to universities I attend, so I may find some good articles and references in them.

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Blinky:

You may want to look into:

-- Risk Analysis

-- Failure Mode and Effects Analysis / Failure Mode, Effects and Criticality Analysis

-- the Project Management method (including Critical Path method)

which provide methods to systematically deal with large numbers of issues and options. These originaly grew out of aerospace and other enginnering fields, but are applicable to a wide range of fields, including general business management.

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-- the Project Management method (including Critical Path method)

I would recommend looking at other aspects of optimization first before diving into critical paths, if you choose to venture down a more mathematical modeling route. For example, basic linear programming models and applications.

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