Overview

Welcome to the world of Rational thinking.

Introducing "Rational Will", a modern and intuitive decision analysis software for making good decisions.

making-a-choice

What is a Good Decision? Or a Bad Decision?

Russian-rouletteIn real life, most of the time, a decision is judged by its outcome, which is very unfortunate. Have you ever thought about playing Russian roulette? It is a gamble where the player places a single round in a revolver, spins the cylinder, puts the muzzle against his or her head, and pulls the trigger. If he wins, he gets a million-dollar. The probability of survival is 5/6. Yet, will you dare to play this game? If you love your life, then the answer should be a big 'No', right? If you die, the cost of your loss should be infinitely negative. Even if you win once, will you play this game again? No. Because you were just lucky, which is called "dumb luck." No matter how many times you win, the decision to play this gamble is always bad.

decision-tree-playing-russian-roulette

So, the key thing is 'the process of making a decision.' Not the outcome. In the book "Winning Decisions: Getting It Right the First Time" the author referred to the good outcome as 'dumb luck' when the process of making the decision was not good.

dumb-luck

None can guarantee the outcome for any uncertain event. But, the rational decision-making process maximizes the probability of the best outcome, and save you (with reasoning) from regrets if you get a bad outcome.

Prerequisites

As a user of the Rational Will software, you do not need to remember a lot of complex maths and theories just to make a decision. The software will apply Normative Decision Theories and Behavioral Economics behind the scene and it will present you with a lot of meaningful metrics and charts so that you can make a rational decision every time. If your decision problem is very simple like, which car to buy, should I rent or buy, etc, then, you can use this software without knowing any theories at all. Decision Matrix or Analytic Hierarchy Process tool can be used easily for such decisions. If your decision problem contains uncertainty, then obviously an understanding of probability and Expected Value will be required.

If you understand the following concepts, you will find this software a very exciting tool for modeling lots of complex and real-life decision problems. Even though, it is not necessary to know everything listed below.

  • Multiple-criteria decision analysis
  • Risk Profile
  • Monte Carlo Simulation
  • Utility Function and Utility Value
  • Probability Distribution
  • Stochastic Dominance (A powerful concept to judge uncertainties)
  • Decision Tree (If you want to use the Decision Tree tool)
  • Various Risk Metrics like Value at Risk, Entropy, etc. (If you want to get more perspectives of the uncertainties, in addition to Expected Value)
  • Influence Diagram
  • Markov Decision Process / Markov Chain (If you want to model uncertainties with repeatable states)
  • Bayesian Inference (If you want to update your beliefs about an uncertainty based on experimentation and observations)

Please note that the software will not show you a complex user interface assuming that you are familiar with these topics. Rather, the software will unfold the advanced user interface only when required. In that way, you can always feel the user-friendliness of this software.

Modeling Tools offered by Rational Will

The same decision problem can be framed in different ways. Therefore, Rational Will offers you various decision modeling tools, like Decision Tree, Decision Matrix, Analytic Hierarchy Process, Influence Diagram, Markov Decision Process, Cost-Benefit Analysis, Pros, and Cons Analysis.

When you start the Rational Will software, you will be presented with the following screen, where you can choose the decision modeling tool you want to use.

main_screen

Decision Tree

The most versatile tool is the Decision Tree. Decision Tree lets you model a sequential scenario with uncertainties and help you to find an optimum strategy. In general, a Decision Tree lets you calculate the Expected Value of some uncertain nodes and let you chose a node that has the highest expected value. But, our Rational Will Decision Tree tool is an advanced modeling tool that lets you do a lot more. You can use probability distribution and generate a Risk Profile based on Monte Carlo Simulation. You can model Multi-Criteria / Multiple Objective with various Utility Functions, various types of criteria like Subjective type, Boolean type, Categorical type, Monetary type with an interest rate, and the software calculates Net Present Value, etc. Sensitivity Analysis and A plethora of risk metrics are calculated for you with Value at Risk, Expected Utility, Entropy, etc.. You can always have your Plan-B ready with a decision tree.

decision_tree

You will discover that the Rational Will Decision Tree tool gives you a streamlined user experience that can make you addicted to keep modeling all of your real-life problems.

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Decision Matrix

The next useful tool is the Decision Matrix. Decision Matrix lets you select the best option based on many criteria. Common examples are, "Which car to buy, based on Price, Mileage per gallon, Comfort, etc.", "Which candidate to hire, based on years of experience, skill level, etc.". Whatever you can do in Decision Matrix, most of them can be modeled in Decision Tree too. But, if you do not have sequential steps that happen one after another, Decision Matrix can be an interesting tool use. Not only that, but Decision Matrix can also create some other exciting views like Regret Matrix, Feature Comparison, etc.

car_selection

Rational Will Decision Matrix is an advanced decision analysis tool, which is not limited to just the matrix. Rather, you can model uncertainty and Utility Function for every criterion of an option. You can even incorporate Probability Distribution. Then Monte Carlo Simulation can be generated. The risk profile is generated for any uncertain situation. Sensitivity Analysis and a lot of metrics are calculated. The benefit to cost ratio, Minimax Regret analysis, etc. are just a few examples of what can be done with the Decision Matrix. You can model an advanced utility function in the Decision matrix too.

Analytic Hierarchy Process

The Analytic Hierarchy Process is a very well known popular Decision Matrix model where all of the criteria are subjective. In order to use the Analytic Hierarchy Process, please choose the Decision Matrix tool and specify all of your criteria as Subjective Criteria. Decision Matrix support a variety of objective attribute types, like Subjective, Boolean, Number, Monetary, Categorical, etc. If all of your objectives are a Subjective type, then Decision Matrix present you Analytic Hierarchy Process modeling User Interface. Analytic Hierarchy Process is a particularly useful method when the decision-maker is unable to construct a utility function.

analytic_hierarchy_process

Markov Decision Process

When you have a set of situations that can be repeated based on some set of your actions, then you may want to evaluate a policy. The policy tells you what action to perform in that situation. For example, you run a store, and you have three situations, "Good sale," "Bad sale," "Moderate Sale." In these states, you can take some actions like "Advertise more," "Advertise less." Now, you notice that, when you are in a Good sales state, more advertising costs money but does not increase sales. But if you do not advertise more, you may lose the sale. So, you may need to find a policy, should you advertise more when you have a bad sale? Should you advertise less when you have a bad sale? Etc. A Markov Decision Process can model such a scenario.

Rational Will Markov Decision Process analyzer will calculate a policy for you, and then, based on recommended action, it will generate a Markov Chain for you.

Markov_ Decision_ Graph

Influence Diagram

Influence Diagram is a brainstorming tool. Say, you have a complex problem. Before you forget some ideas, you want to pull a piece of paper to jot down as much information as possible, right? At that stage, you do not want to be overwhelmed by lots of analysis and modeling detail. Rather, you want to capture the problem in a high-level diagram. That is the intent of an Influence Diagram. Rational Will gives you an influence diagram tool, which is the simplest modeling tool in this world. It has just 4 or 5 shapes that represent some critical elements of a decision. Even if you did not learn how to create influence diagram properly, you can drag and drop some shapes, type your idea, connect the nodes with arrows, and that's it.

Influence_diagram

Pros and Cons

Lastly, the Pros and Cons analysis. Well, we do not recommend using Pros and Cons for any serious decision-making scenario. But, most of the people are very familiar with using Pros and Cons for decision making. So, until she learns the details of another modeling tool, at least, she can use this tool temporarily. But, it is not just a throwaway tool by any means. We tried to make this tool impressive enough to be motivated. The Pros and Cons tool in Rational Will is not just a weighted summation tool. Rather, it let you model uncertainty, let you use Pairwise Comparison, and some more cool features. Therefore, if you prefer to use Pros and Cons for your decision making, you will enjoy its rich offerings.

If you are in a dilemma about anything like, "should I do it or not," "should I get a divorce?", like this, and you don't want to spend much effort on deep analysis, then a Pros and Cons analysis can serve the purpose quickly.

Should_ I_get_a_divorce

A bundle of many of our software

You may notice that we offer some stand-alone decision analysis software, like Decision Tree Analyzer, Markov Decision Process, Analytic Hierarchy Process, etc. If you get Rational Will, then you will get them into a single software, which is definitely a streamlined user experience.

Finally,

Students of the Decision Analysis course will find this tool extremely useful for learning various concepts from Normative Decision Theories, Utility function from Behavioral Economics, Sensitivity Analysis, Monte Carlo Simulation, Stochastic Dominance, Multi-criteria decision analysis and lots more. Even Markov Chain and Markov Decision Process modeling are included within Rational Will. Rational Will is intuitive enough with the modern user interface and user experience that it can be used easily in daily life for solving real-life problems.

Make Rational Decisions and never regret a decision again.

Last updated on Nov 17, 2020