Teaching plan for the course unit

 

 

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General information

 

Course unit name: Decision Making

Course unit code: 363674

Academic year: 2021-2022

Coordinator: Josep Maria Izquierdo Aznar

Department: Department of Business

Credits: 6

Single program: S

 

 

Estimated learning time

Total number of hours 150

 

Face-to-face and/or online activities

60

 

-  Lecture with practical component

Face-to-face and online

 

50

 

-  Problem-solving class

Face-to-face and online

 

10

 

(The group is split in two.)

Supervised project

30

(Completion of activities that must be handed in for assessment.)

Independent learning

60

 

 

Recommendations

 

This subject does not have pre-requirements.

 

 

Competences to be gained during study

 

   -

To be able to make financial and business decisions, taking into account the current economic situation.

(Capacity to identify the essential elements of a decision-making problem: agents, available actions, information available to the agents, uncertainty factors, as well as the results and consequences of the different potential actions.
Capacity to establish assessment criteria and organise available options, with or without risk.
Ability to think strategically by formulating hypotheses on the behaviour of others.
Capacity to make effective economic and business decisions by using adequate qualitative or quantitative measures.
Capacity to analyse the implications of choosing criteria for collective decisions.)

   -

To identify the economic agents that make up an economy and to understand how they interrelate so as to take economic decisions with full awareness of their effects.

Learning objectives

 

Referring to knowledge

Decision making can be understood in an individual framework, in a framework of interaction with other individuals or as a collective agreed decision. The objective of the course is to offer a systemic approach to the different types of decision-making problems, so that the most conscious and weighed up decisions can be made (best decisions) and that they can be effective and applied in a real context.

In the context of individual decisions, the stress is put on determination and the comparative and assessment criteria of the different options; and the alternatives are classified according to the result: certain, uncertain and risky, and also multi-attributed options.

As for decisions interacting with other agents, students will be introduced to the game theory method in a context of complete information. More specifically, the concept of equilibrium is analysed, in simultaneous and sequential situations, and their rationalisation through a process of dominated alternatives or backward induction.

As for collective decisions, students analyse situations with two alternatives (yes/no) by assessing the power position of each individual or voter in the different voting systems. When there are more than two alternatives, the properties of the different social election rules are analysed comparatively, and the difficulty to determine the social organisation of different options. A specific collective-decision problem is analysed from infinite alternatives derived from gain distribution or cooperative cost allocation.

 

Referring to abilities, skills

In relation to individual decisions, students must be able to:

  • Analyse decision-making situations and determine its components, by using a model of the situation.
  • Recognise the best option for the decider by using an ordinal utility function to represent their preferences.
  • Model decision-making problems in a risk environment through decision tables or decision trees and find the best option.

 

As for interactive decisions, students are expected to:

  • Formulate simple situations as uncooperative games, identifying the players, the strategies available and the possible outcomes of every coalition.
  • Use the concept of domination in games in a strategic manner to simplify alternatives.
  • Apply the concept of the Nash equilibrium to deduce the predictable behaviour of economic agents.

 

As for collective decision-making, students are expected to:

  • Identify in Yes/No decisions, provided an election system is set, the winning voter coalitions, and to calculate the individual power of each voter.
  • Apply the most recognised voting methods (election rules) so as to select an alternative from a variety of options and perform a comparative analysis of the characteristics of the rules.

 

 

Teaching blocks

 

1. A decision-maker with preferences among alternatives

1.1. How do we make decisions?

1.2. Elements in a decision-making problem

1.3. Multi-attribute alternatives

1.4. Optimal decisions with infinite alternatives

2. A decision-maker in front of risk

2.1. Decision tables

2.2. Choosing between lotteries

2.3. Attitudes facing risk

2.4. Sequential decisions; decision trees

3. Two decision-makers: decisions and games

3.1. Simultaneous decisions; bimatrix games

3.2. Decision rationalisation: domination

3.3. Nash equilibrium

3.4. Sequential decisions; backward induction

4. Collective decisions

4.1. Two-alternative voting systems; power indices

4.2. Multiple alternatives; social election rules

 

 

Teaching methods and general organization

 

The methodology used to meet the objectives are theory lectures with the whole group, and problem-solving lessons (with the whole group or split in two subgroups); in addition, practical activities are completed throughout the course.

During theory sessions, the analysis of different examples requires students to understand the basic concepts and criteria. The general concepts and procedures are then applied to more complex examples originating in today’s economic reality. The practical problem-solving sessions aim at a more personalised approach to students so as to acquire and improve the specific skills to solve decision-making situations.

The practical activities must be completed individually outside class hours and aim at consolidating the reflection on concepts and techniques as explained in class. The calendar for these activities is published in the Virtual Campus.

 

 

Official assessment of learning outcomes

 

As a general rule, continuous assessment is the standard procedure. Students who submit the last continuous assessment test are evaluated under this procedure. Students who do not submit the last continuous assessment test are entered for single assessment. Students are entitled to an official examination period and a repeat assessment one both for the continuous and single assessment procedures.

a) Continuous assessment consists of two written examinations and a series of distance learning activities. The examinations are expected to be carried out face-to-face, although this may vary depending on the health situation. The first examination covers the contents from blocks 1 and 2 and is worth 40% of the final grade. The second examination covers the contents from blocks 2, 3 and 4 and is worth 45% of the final grade. Distance learning activities are worth 15% of the final grade. The dates for the examinations and submission of the activities are made available via the Virtual Campus at the beginning of the course.

In order to assess the acquisition of competences established for this subject, both in the activities and tests, students must solve problems in which identifying the decision context (i.e., the agents influencing our decisions or influenced by them) and the economic context (risk presence and assessment) is a key element when choosing and using decision criteria. 

In order to pass the subject through continuous assessment, the weighted average of the exams and activities must be 5 (out of 10) or higher, and the marks for the first and second exams cannot be lower than 3 (out of 10) each. Attendance is also taken into account.

b) In the repeat assessment for the continuous assessment students sit a single examination on the theoretical and practical aspects of the course on the date established in the calendar.

 

Examination-based assessment

In both the first examination period and the repeat assessment period, students sit a single examination on the theoretical and practical aspects of the course on the date established in the calendar.

 

 

Reading and study resources

Consulteu la disponibilitat a CERCABIB

Book

BIERMAN Harold; BONINI Charles P; HAUSMAN Warren. Análisis cuantitativo para la toma de decisiones. Madrid : Elsevier España, 1994

Catāleg UB  Enllaç

GARDNER, Roy. Juegos para empresarios y economistas. Barcelona : Antoni Bosch, 2009

Catāleg UB  Enllaç

GILBOA, Itzhak. Making Better Decisions : Decision Theory In Practice. Chichester : Willey-Blackwell, 2011

Catāleg UB  Enllaç

HAMMOND, John S. Decisiones inteligentes : guía práctica para tomar mejores decisiones. Barcelona : Gestión 2000, 2008

Catāleg UB  Enllaç

PETERSON, Martin. An introduction to Decision Theory. Cambridge: Cambridge University Press, 2009

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TAYLOR, Alan D. Mathematics and politics : strategy, voting, power and proof. New York: Springer-Verlag, 2008

Catāleg UB  Enllaç