Deciding on the Decision Situation to Analyze: The Critical First Step of a Decision Analysis

Using the right decision frame, in the sense of selecting the right decision situation to analyze, is regarded as a critical part of a decision analysis effort, but there are few guidelines on how to systematically generate alternative decision situations and how to select the best one. In practice, the decision situation is typically not explicitly selected, or even well defined, which easily leads to deciding about treating symptoms instead of underlying causes; to deciding with a narrow scope that misses important elements; and, in general, to missing the opportunity of analyzing valuable alternative decision situations.

This paper presents several distinctions and three approaches for generating significantly different decision situations and selecting the one that is best for the decision maker’s current priorities and circumstances. A key element of this work is treating the selection of the decision situation as a decision in its own right and using decision analysis tools to generate a rich set of alternative decision situations and gain clarity on which element of the set is most valuable to analyze.