Thinking and Deciding

Chapter 14
Decision analysis and values
A promising approach to the problem of measuring utility and making difficult decisions
is that of multiattribute utility theory (MAUT). The idea is to separate utility
into attributes. Ideally, each attribute should correspond to a goal or value that is
separate from those corresponding to the other attributes. This approach allows us
to consider all relevant goals in the same way. For policies for the prevention of oil
spills, the prevention of the deaths of marine mammals and the saving of money for
gasoline consumers are two goals. The problem is how these are to be traded off.
How many sea otters for how many cents per gallon. But there are many other goals
in the same decision. MAUT considers all of them at once, in the same way.
This chapter discusses the application of MAUT in decision analysis. The main
issues concern the examination of values and the weighing of values against each
other. So we begin with some discussion of values themselves. Values are, technically,
the functions we use to assign utilities to outcomes. They are also what I have
referred to as goals. They are the criteria by which we evaluate the outcomes of our
decisions.
With all the inconsistency in utility described in the last chapter, we might ask
whether utilities are real? Many have asked this question (for example, Fischhoff,
1991), and the idea that “preferences are constructed” has become a part of conventional
wisdom. Utilities may be real but difficult to assess.
First, some of the problems that people have are the result of various heuristics
or psychophysical distortions. These are peculiar to the tasks we give them. These
problems might be overcome with consistency checks. Consistency checks are commonly
used in decision analysis.
Second, recall from section 11 the distinctions among predicted utility, decision
utility, and experienced utility. Predicted utility is what we get from judgments.
Decision utility is what we infer, indirectly, from asking people about hypothetical
decisions. Experienced utility is the real thing. But, as I argued, some of our goals
do not concern experiences, so we must broaden the concept of experienced utility
to include these. We can still assume some reality. Some outcomes are better than
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