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PrOACT

Problem

Objective

Alternatives

Consequences

Trade-offs

Uncertainty

Risk

Tolerance

Linked Decisions

Psychological Traps

analyticalQ book review by Anne Ku

Smart Choices

by Hammond, Keeney and Raiffa

Copyright 1999

5 August 2000

I read this book over a year ago - but it still reins my mind whenever I have to make a decision. PrOACT (on left) is the process they advocate for multi-objective, multi-criteria decisions with no uncertainty.

There are very few diagrams. The jargon is easy to understand. The examples are easy to relate to. It is the kind of book I would like to write, i.e. for the masses. However, I would have more diagrams. I would like to analyse my past decisions with respect to the process I went through. I would also identify any heuristics or biases that influenced my thinking. Then I would like to compare the results with how much better they would have been had I used the PrOACT method. Having learned from my past decisions, I would then like to apply this method and my own objective of flexibility for future decisions. I expect this exercise to improve my decision making in the future as well as help me structure my thinking for the writing of my flexibility book.

They view a decision problem as a decision opportunity. Ask what triggered this decision. Why am I even considering it? Include your assumption of what the decision problem is. The triggering occasion. The connection between the trigger and the problem. Question the constraints in your problem statement. Identify the essential elements of the problem. Understand what other decisions impinge on or hinge on this decision. Establish a sufficient but workable scope for your problem definition. Gain fresh insights by asking others how they see the situation. Re-examine your problem definition as you go. Maintain your perspective.

Objectives form the basis for evaluating the alternatives open to you. They are your decision criteria. They are important for making a balanced decision. Objectives help you determine what information to seek. Objectives can help you explain your choice to others. Objectives determine a decision's importance and, consequently, how much time and effort it deserves. When buying a PC, for instance, I thought of what I wanted to use it for: word processing web browsing web development: graphics, html editting other office tools: excel, powerpoint printing, scanning.

The authors are very well-respected in the field of decision analysis, which I have studied at length. They are able to distill the essence of a vast literature of psychology as well as economics. The last chapter is particularly interesting - the different heuristics and biases of human judgement. They also point out eight most common and most serious errors in decision making:

  1. Working on the wrong problem
  2. Failing to identify your key objectives
  3. Failing to develop a range of good, creative alternatives
  4. Overlooking crucial consequences of your alternatives
  5. Giving inadequate thought to tradeoffs
  6. Disregarding uncertainty
  7. Failing to account for your risk tolerance
  8. Failing to plan ahead when decisions are linked over time