Foundations of Decision Analysis, 1st edition

  • Ronald A. Howard
  • Ali E. Abbas


For courses in Decision Making and Engineering.


The Fundamentals of Analyzing and Making Decisions

Foundations of Decision Analysis is a groundbreaking text that explores the art of decision making, both in life and in professional settings. By exploring themes such as dealing with uncertainty and understanding the distinction between a decision and its outcome, the First Edition teaches readers to achieve clarity of action in any situation.


The book treats decision making as an evolutionary process from a scientific standpoint. Strategic decision-making analysis is presented as a tool to help students understand, discuss, and settle on important life choices. Through this text, readers will understand the specific thought process that occurs behind approaching any decision to make easier and better life choices for themselves.


Table of contents

Part 1 Defining a Good Decision

Chapter 1: Introduction to Quality Decision Making

Chapter 2: Experiencing a Decision


Part 2 Clear Thinking and Characterization

Chapter 3: Clarifying Values

Chapter 4: Precise Decision Language

Chapter 5: Possibilities

Chapter 6: Handling Uncertainty

Chapter 7: Relevance


Part 3 Making any Decision

Chapter 8: Rules of Actional Thought

Chapter 9: The Party Problem

Chapter 10: Using a Value Measure


Part 4 Building on the Rules

Chapter 11: Risk Attitude

Chapter 12: Sensitivity Analysis

Chapter 13: Basic Information Gathering

Chapter 14: Decision Diagrams


Part 5 Characterizing What you Know

Chapter 15: Encoding a Probability Distribution on a Measure

Chapter 16: From Phenomenon to Assessment


Part 6 Framing a Decision

Chapter 17: Framing a Decision


Part 7 Advanced Information Gathering

Chapter 18: Valuing Information from Multiple Sources

Chapter 19: Options

Chapter 20: Detectors with Multiple Indications

Chapter 21: Decisions with Influences


Part 8 Characterizing What You Want

Chapter 22: The Logarithmic u-Curve

Chapter 23: The Linear Risk Tolerance u-Curve

Chapter 24: Approximate Expressions for the Certain

Chapter 25: Deterministic and Probabilistic Dominance

Chapter 26: Decisions with Multiple Attributes (1)–Ordering

Chapter 27: Decisions with Multiple Attributes (2)–Value Functions

Chapter 28: Decisions with Multiple Attributes (3)–Preference Equivalent

Prospects with Preference and Value Functions

for Investment Cash Flows: Time Preference

Probabilities Over Value


Part 9 Some Practical Extensions

Chapter 29: Betting on Disparate Belief

Chapter 30: Learning from Experimentation

Chapter 31: Auctions and Bidding

Chapter 32: Evaluating, Scaling, and Sharing Uncertain Deals

Chapter 33: Making Risky Decisions

Chapter 34: Decisions with a High Probability of Death


Part 10 Computing Decision Problems

Chapter 35: Discretizing Continuous Probability Distributions

Chapter 36: Solving Decision Problems by Simulation


Part 11 Professional Decisions

Chapter 37: The Decision Analysis Cycle

Chapter 38: Topics in Organizational Decision Making

Chapter 39: Coordinating the Decision Making of Large


Part 12 Ethical Considerations

Chapter 40: Decisions and Ethics Groups

For teachers

All the material you need to teach your courses.

Discover teaching material

Published by Pearson (January 21st 2015) - Copyright © 2016