Agricultural Economics Department
Date of this Version
10-5-2022
Citation
Cornhusker Economics (October 5, 2022)
Agricultural Economics, University of Nebraska-Lincoln
Abstract
Decision scientists have many algorithms for making decisions. These algorithms can be qualitative and subjective, such as following a 7-step process, to highly quantitative procedures like minimax regret, or linear programming. These techniques are very different from each other, but in one way they are very similar; they never, ever suggest the manager become emotional and use past decisions to guide the future.
Past decisions and events should guide decision-making. They help managers assign probabilities as well assessing performance. Viewing these events and situations as permanent paths is where sunk costs become problematic.
Includes discussions of four scenarios.
Included in
Agribusiness Commons, Agricultural Economics Commons, Entrepreneurial and Small Business Operations Commons, Finance and Financial Management Commons