Jan C Reading Assignment Decision Theory s indigestion

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Chapter 1: Jan. 16th

1. What does the author mean by “normative” decision theory?

Normative decision theory is the theory of how decision should be made. “Ideally” how should
we solve this problem? Everyone should come to the same conclusion based on logical thinking,
best outcome and highest expected value.

‘Pair of Jeans’ ex. – Your mom comes into the room and informs you that she found you the
best, cutest pair of jeans (from K-mart). Without even looking at them, you know you don‟t want
them. You have already preconceived notion of your mother‟s tastes, k-marts reputation and
about how much it costs for „nice jeans‟. This is the basis for Utility.

2. What does the author mean by descriptive decision theory?

Descriptive decision theory is the theory about how decisions are actually made. “Realistically”
how people normally solve problems.

“When the *^%# hits the fan, how are problems solved quickly and effectively?”

Criticisms of Non-Sequential Methods…

These methods are too structured and that people don‟t actually made decisions with thought out
processes. Hence “Parallel processes”. (Figure out what problem brought you to having to
make a decision in the first place… then, and only then, can you „develop‟ the solution. Do not

From Chapter 2:

1. What are the five steps of the decision process according to Brim?

1. Identification of the problem
2. Obtaining necessary information
3. Production of possible solutions
4. Evaluation of such solutions
5. Selection of a strategy for performance

From Chapter 3:

1. What does the author mean by “value-standard?
The choice of a value-standard for decision-making (and for life) is the subject of moral
philosophy. IE. What you prefer.

Cannon Digital Replacement Service is valued more than any other Digital Camera
Replacement services. Therefore I will only buy Cannon Digital Cameras.

3. Using your example, express the three (3) different methods of delineating “value
patterns” in terms of:

a. relations – Nike is > than Reebok> than Puma. Therefore Nike is > than Puma

b. numbers – Nike = #1, Reebok=#2, Puma=#3

c. comparative value terms – Better than, equal to, better or equal;
A>B = Strong Preference (nike)
A=B – indifferent        (reebok)
A≥B- Weak Preference     (puma)
Redundancy - ( A< B)

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Class 1.3

20 Jan – Reading Assignment: Decision Theory, Hansson; Chapters 4 & 5;

From Chapter 4:

1. According to the readings, define the following terms:
a. Alternative (general term); - A choice between two solutions to a decision.
b. Open alternative; - an open alternative is something that can be changed or
discovered by the decision maker. Example, what to do with a free evening…
c. Closed alternative; a closed alternative means that no more possible solutions or
outcomes can be added. Example, who to vote for in the upcoming election…
d. Voluntary closure; these are groups of alternatives that the decision maker has
purposefully limited. Ex. You decide that spending your evening should only consist of
two choices: Studying or Going to the movie theater.
e. Involuntary closure; this groups alternatives have been indirectly closed either by
others in a group or unforeseeable circumstances.
2. Class example;
This semester I want to take a class that is a NON-IST CLASSS. The only
available time openings are on 9:45am and 11:00. The NON-IST CLASS = Open;
The time constraints= Voluntary Closure.

3.      Define “states of nature,” and provide an example of your own for discussion.
An unknown that you (decision maker) is trying to anticipate and prepare for.

State of Nature 1                  State of Nature 2
Alternatives                     Boss Gets mad                      Boss is cool
Go to Starbucks (delicious)      Satisfied, Embarrassed/Fired       Satisfied, Gain all Knowledge
(- 15 )                           (+20 )
Buy at Work (crappy)             Not Satisfied, Indigestion         Not Satisfied, Indigestion
(-60)                             (-10)

This is not enough information to make a “Good” decision on this situation… You cannot
determine the state of nature of your boss. To do this, you need to add Utility to the States of
Nature.

Utility = 0-1%; Units of (whatever) – This is a numerical representation.

   Using numerical representations allow for further calculation or choices. It also adds
perspective… I.E. 1000 people will die, or .001% of the population will die.

However… 100  ≠ \$25

KEY TERMS

Outcome – a combination of State of Nature and an Alternative.
Risk- You know the probability.
Uncertain - The probability is unknown.
Ignorant – You don‟t even know there is a problem.
Decisions under Certainty – something that you know for a fact is a probable outcome.
Ex. Every Monday, my boss is mad (what is that probability = 52/365)BUT 1 Monday might
be his birthday (what is the probability = 1/365)

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Class 1.4

Review: Chapters 1-5 in Decision Theory, Hansson & Daily Questions; and Read:
Understanding Utility Examples

Before next Class Take Quiz 1 in ANGEL by Sunday, 26 Jan @ 8:00 PM

Class 1.5
27 Jan - Reading Assignment: Introduction to Decision-Making, Harris; Part I; Definitions and
Concepts

Daily Questions (complete and bring to class):

1. The author’s lists three basic kinds of decision, define and provide a “simple” example of
ea:
a. Decisions whether -These are „ if‟ questions… deciding yes or no to an act.
i. Should I go on spring break?
b. Decisions which – Choosing „which‟ choice from a bank of possibilities.
i. Should I go to Cancun or Mexico?
c. Contingent decisions – Decisions based on unforeseeable circumstances
i. If there is no hurricane, I will go on spring break vacation.
2. Explain Decision Making as a Recursive Process
a. Decisions that do not follow a logical/linear decision making patterns. The
alternative influences the criteria, as well as the criteria influence the
alternatives. As new information arises the weight of each alternative and its
criteria changes, forcing the decision maker back into the oodoloop.
3. Definitions:
a. Information – applies to all aspects of decision making. (the whole data set)
b. Alternative – another form of information.
c. Criteria – measure.
d. Goals –the wanted outcome of the decision.
e. Values – numerical identification of choices.
f. Preferences – influences how you assign values to decisions or criteria. An order
of preferred choices ranked from least to highest.
4. What is meant by the decision environment? Describe a decision environment that you
have operated.
5. What does the author mean by, the Effects of Quantity on Decision Making?
a. Provide an example of quantity effects that influenced your decision making
b. How might a security analyst be influenced by the effects of quantity?
6. Read carefully the section on Decision Making Strategies: Optimizing, Satisficing,
Maximax and Maximin and start considering a scenario utilizing one of the strategies;
you will write and exchange scenarios with a fellow student in an in-class exercise. See
example scenario in the reading: “Fourth & ten.”

Class 1.6

29 Jan – Reading Assignment: Introduction to Decision-Making, Harris; Part II; Approaches to
Decision Making

Daily Questions (complete and bring to class):
1. Of the four (4) decision strategies discussed, which focuses on the choosing an alternative
that promotes the greatest payoff? Maximax What is another name for this strategy?
Maximize the maximums
2. Which strategy seeks an alternative that considers the best of the least? Maximin What
type personality would choose this approach? Pessimist
3. Complete the table below comparing Brim’s decision steps (use all six) with the Decision
4. How do they compare? How do they differ?

Brim and Harris decision processes compare in the first two steps. They both start the
process in the same manor and gather necessary information. They differ because Harris
note only thinks of possible alternatives; it develops them and categorizes them into
maximizing and minimizing alternatives.

Brim’s Decision Process:                      Harris’ Decision Process:
Identification of the problem                Identify the Decision and Goals
Obtaining necessary information               Get the facts
Production of possible solutions              Develop Alternatives
Evaluation of such solutions                  Rate each alternatives
Selection of a strategy for performance       Rate the risk of each alternative
Make the decision

Class 1.7

3 Feb - Reading Assignment: Introduction to Decision-Making, Harris; Part III

Read: Difference Between EU & EV

Daily Questions: Cut & paste problem below; calculate & bring to class

1. Calculate Expected Value. Refer to the reading examples and calculate the expected
value of each of the following risks. Divide the prize by the chance, and compare the
answer with the cost of the ticket to decide whether the risk is worth taking.

a. Irish Sweepstakes. Ticket: \$2.50 Prize: \$100,000,000 Chance: 1 in 60,000,000
b. State Lottery. Ticket: \$1.00 Prize: \$42,300,000 Chance: 1 in 14,800,000 (Note:
Calculate the expected value for just a single winner and for the number of
winners you'd expect based on 80,000,000 entries.)
c. Reader's Digest Sweepstakes. Ticket: 32 cent stamp to return the entry Prize:
\$6,000,000 Chance: 1 in 256,000,000
d. Publisher's Clearinghouse Sweepstakes. Ticket: 32 cent stamp to return the entry
Prize: \$10,000,000 Chance: 1 in 140,000,000
e. Charity Raffle. Ticket: \$5.00 Prize: \$12,400 (new car) Chance: 1 in 3,000
f. Vegas Roulette #1. Ticket: \$20 bet Prize: \$380 Chance: 1 in 35
g. Reno Roulette #2 Ticket: \$25 bet Prize: \$975 Chance: 1 in 35
h. Pearl in Oyster Ticket: \$10 Prize: \$50 Chance: 1 in 8
i. Extended Warranty Ticket (Price of Extended Warranty): \$45 Prize (Cost of
average covered warranty repair): \$180 Chance: 1 in 12
j. In Your Dreams Ticket: \$1.00 Prize: \$500,000 Chance: 1 in 250

2. Read the Expected Value scenarios very carefully; you will be teamed up with a fellow
student to solve an EV problem in an In-Class Exercise.

Class 1.8

5 Feb: Review: Expected Utility & Decision Tables for Quiz 2 Practical Application

Before Class: Take-Home Activity 3: “Picking a Winner,” complete and post in ANGEL; file
name: lastname_takhom3.doc

Class 1.9

10 Feb - Reading Assignment: Decision-Making Techniques, Harris

Daily Questions (complete and bring to class):

1. According to the author, what are the four major benefits to planning?
2. Considering the three (3) levels of planning, order the following decisions according to
their level of planning:
a. Completing SRA 231
b. Keeping up with current world events related to SRA
c. Filling out a job application to NSA
d. Researching careers in the Analytic field
e. Participating in SRA Club Activities
f. Meeting course requirements (attending classes and doing homework)
g. Choosing an “I” School that includes a Security Studies Program
h. Majoring in SRA
3. What is the benefit of using a “Measured Criteria” technique or Weighted Decision
Table?

Review the Decision Matrix & Weighted Decision Table examples carefully; you will be
completing a similar example in class.
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Class 2.10

12 Feb - Reading Assignment: Introduction to Critical Thinking, Harris

Daily Questions (complete and bring to class):
1. What does the author say about “claims?”
2. Choose (and bring to class) a current event article from a newspaper or magazine that
makes an unfounded claim (the more outrageous the better). Write down the claim.
3. Choose (and bring to class) a product advertisement from a newspaper or magazine that
makes an unfounded product claim (the more outrageous the better). Write down the
claim.
4. What does the author mean by the phrase, "To assume is to be deceived?"
5. Review Terms and Concepts:
a. Analysis
b. Synthesis
c. critical thinking
d. circumspection
e. articulation
6. Be able to distinguish between truth and validity.
7. Be able to recall the four requirements for good thinking?

Class 2.11

17 Feb - Reading Assignment: Critical Thinking and Intelligence Analysis, Moore, Pages 1-19

Daily Questions (complete and bring to class):

1. Explain:
a. Inductive Reasoning;
b. Deductive Reasoning; and
2. What does the author mean by “meta-cognitive” and “cognitive” thinking that supports
the intelligence analyst critical thinking process?
3. See: Role of Questions, page 17
a. What does the author mean by the statement, “…in intelligence the right
b. Considering the Levels of Questions: Critical Thinking in a Social Setting;
provide an example of a problem or issue that would use this type critical thinking
process and who (or what agency) might consider it.

Class 2.12
19 Feb – Reading Assignment: Critical Thinking and Intelligence Analysis, Moore
Pages: 20 -33

Daily Questions (complete and bring to class):

1. How did the Soviets utilize denial and deception to influence the American’s “points
of view” regarding placement of missiles in Cuba?
2. Why did the U.S. analysts get it wrong?
3. Considering “hindsight” as the author does; what methodology would prevent a
modern-day repeat of the analysis failure of the Cuban Missile Crisis? Cite an
4. (Not in the reading) Considering the author’s point of view regarding use of critical
thinking techniques and analysis; how did we fair prior to the invasion of Iraq? Did
we get it right?

Class 2.13
24 Feb- Reading Assignment: Inferences and Assumptions

Daily Questions (complete and bring to class):

1. What is the basic difference between an inference and an assumption (according
2. What does the author mean by leap of faith regarding inferences?
3. What happens to an assumption if left untended?
4. How do beliefs and bias shape assumptions and inferences?

Class 2.14

26 Feb – Reading Assignment: Introduction to Terrorist Analysis, Parts 1 & 2

Complete Take-Home Activity TBD

Class 2.15
3 Mar – Reading Assignment: Introduction to Terrorist Analysis, Part - 3

Complete Take-Home Activity TBD

Class 2.16

3 Mar - Reading Assignment: Introduction to Terrorist Analysis, Part - 4

March 10 & 12: Spring Break

17 March – Reading Assignment: None

19 March – Reading Assignment: Introduction to Terrorist Analysis, Part – 5

24 March Reading Assignment: Mini Manual of the Urban Guerilla, Pages 1-16
26 March Reading Assignment: Mini Manual of the Urban Guerilla, Pages 17-32

31 March Reading Assignment: Case Study Methods and Introduction to Terrorist Analysis,
Part 6