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Economic Decisions in Engineering

IE54600

Spring 2018

Days/Time: TTh / 12:00-1:15 pm
Credit Hours: 3

Learning Objective:
Course Objective We will learn decision making and rationality, including decision analysis; decision making under uncertainty; various descriptive and prescriptive models from operations research, economics, psychology and business. Applications are drawn from engineering decision-making, public policy, and personal decision-making. Attention is also paid to designing aids to improve decision-making. Use of risk analysis software is optional (not required).

Description:
Classical decision theory, deterministic decision rules, decision trees, influence diagrams, single/multiple stage analysis, sensitivity analysis; subjective probability, heuristics and biases, Bayesian methods, conjugate belief forms, inference, belief assessment methods, value of information, legal reasoning, risk analysis; utility theory, risk aversion, conflicting objectives, multi-attribute decision theory, analytic hierarchy process.
Tentative Sp2018 Syllabus

Topics Covered:
Classical decision theory, deterministic decision rules, decision trees, influence diagrams, single/multiple stage analysis, sensitivity analysis; subjective probability, heuristics and biases, Bayesian methods, conjugate belief forms, inference, belief assessment methods, value of information, legal reasoning, risk analysis; utility theory, risk aversion, conflicting objectives, multi-attribute decision theory, analytic hierarchy process.

Prerequisites:
Background in probability theory and familiar with general economics concepts.

Applied/Theory: 50/50

Web Address:
https://mycourses.purdue.edu/

Web Content:
Syllabus, grades, lecture notes, homework assignments, solutions.

Homework:
Seven to eight homeworks.

Projects:
None.

Exams:
Two exams and one final exam.

Textbooks:
Official textbook information is now listed in the Schedule of Classes. NOTE: Textbook information is subject to be changed at any time at the discretion of the faculty member. If you have questions or concerns please contact the academic department.
Tentative: Required: Clemen and Reilly, Making Hard Decisions with Decision Tools Suite. No specific edition required and the software that comes with the book will not be used.

Computer Requirements:
ProEd minimum computer requirements.

ProEd Minimum Requirements: view

Tuition & Fees: view

Other Requirements:
None.

SEMESTERS

Spring 2017
Spring 2018
Spring 2019
Spring 2020
Spring 2021
Spring 2022

CURRENT INSTRUCTOR(S)

Mark R. Lehto

Phone
765-494-5428

Email
lehto@ecn.purdue.edu

Office
Purdue University
Grissom Hall
315 N Grant St
West Lafayette, IN 47907-2023

Fax
765-494-1299

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