[Week1]   [Week2]   [Week3]   [Week4]   [Week5]   [Week6]   [Week7]   [Week8]  [Week9]

Managerial Decision Making Session-By-Session Outline

Readings “Codes” below: (CP = in Course Packet, RT = in a Required Text)

*****    This may be the most important thing you have ever read  
****      You can expect to be called on to explain this: it’s important  
***        You should read all of it quickly, underling/highlighting key points  
**          You should skim (mainly intro and conclusion) for the “punch line”  

Week 1:

There is No Writing Assignment Option for Week 1  

Week 1 PPT Slides (pdf format/ six per page) Day 1: Intro

Week 1 PPT Slides (pdf format/ six per page) Day 2: Rationality

Session 1: January 4  MDM Course Intro and “Mental Models”

Topics: 

  • Course Goals and Themes
  • Descriptive, Normative, and Prescriptive Modes of Analysis
  • Mental “Limitations”, Decision Biases, and Heuristics
  • Mental Models

 BEFORE-class Readings: 

 ***   Hogarth, Educating Intuition, Chapter 1, CP 1-1  

***   Hayashi, When to Trust Your Gut, Harvard Business Review, Feb 2001, CP 1-2

**** Munger, A Lesson on Elementary Worldly Wisdom, CP 1-3 

Class Preparation and Discussion Questions:

  1. When is using intuition or "gut feel" an appropriate decision technique?  How does Herbert Simon, in the Hayashi article, define intuition?  What can we do to maximize the effectiveness of our intuition?  Is Hogarth’s idea similar or different?
  2. Charlie Munger (CP 1-3) has been Warren Buffett’s right-hand man for many years.  What are the most important general (not “stock picking”) insights in the first few pages of his talk?  How should they shape the planning of your daily and weekly activities in your next career? What is your favorite pearl of wisdom (if any) in this reading?  What does he mean by “mental models”?

 

Session 2: January 5  Rationality and Probability in Decision Making

Topics: 

  • “Rational” Decision Making—the Paradigm: its strengths and weaknesses
  • Basic Ideas of Probability
  • Expected Utility Theory
  • Unbounded versus Bounded Rationality
  • Satisficing, Mental Shortcuts, and Heuristics  

 

Do web-based survey the night before class.

BEFORE-class Readings:   

**** Belkin, The Odds of That, New York Times, August 11, 2002, CP 2-1


  [Next Week]