Lessons for Decision-Analysis Practice from the Automotive Industry

Robert F. Bordley ()
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Robert F. Bordley: Integrative Systems + Design, College of Engineering, University of Michigan, Ann Arbor, Michigan 48109

Interfaces, 2023, vol. 53, issue 3, 240-246

Abstract: Decision analysis is widely used in making decisions involving low-probability, high-consequence events (e.g., drug discovery, oil and gas drilling, risk reduction). This paper focuses on the automotive industries in which more intermediate uncertainties are important. As in any large organization, different members of the organization have different information and different incentives. In this setting, influence diagrams proved invaluable in identifying the information creditable models need, discovering new distinctions of high value, developing win/win compromises, and enabling higher-value technology transfer. However, these examples also highlight the need for more research on addressing motivational biases within organizations.

Keywords: influence diagrams; dialogue decision process; motivational biases; cost drivers; decomposition; elasticity (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:53:y:2023:i:3:p:240-246

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