Our contest’s winners

Our first Student Decision World Contest has come to an end and it was time for us to pick our winners. In this post we will discuss our winning models and the reason behind our choices.

The challenge was to create the most accurate decision model for the topic: Choosing the best computer to buy or recommend. To do so our participants used Expert Choice’s software, Comparion™ Core.  Comparion Suite is an easy-to-use solution for collaboration and prioritization, delivering transparent team decision-making, tight strategic alignment, and easy-to-communicate results.

Congratulations to our winners:

1. Nina Leonova (Russia) – 8GB IPod Nano with Video
2. Abbas Tariq (Germany) – 2 GB IPod Shuffle
3. Subrat Kumar Swain (USA) – $25 iTunes Gift Card

Nina’s model was the most accurate that we have encountered. She provided us with 8 parent objectives in the choice of her computer and at least 5 of them had sub-objectives amongst which 2 of them had sub-objectives to their sub-objectives! Her model was complete! Maybe a little bit too complete. The problem of having that many sub-objectives or sub-sub-objectives lies in the evaluation process: Having that many criteria to evaluate could be time consuming but makes the decision more accurate.

On top of that she provided us with some additional information in the description of her decision goal and her PowerPoint presentation. She noted that the computer was going to be purchased for everyday use, so she mentioned its needs to be versatile. Because the price was an important factor to her, she gave us a “ceiling price of $1000”; which was consistent with her model since every alternative’s price was roughly below or around that ceiling. Good job!

However she also mentioned in the PowerPoint presentation that the computer might have to travel to “Peter’s parents’ house”. If portability was mandatory, we should not be able to find any desktop computers in her alternatives; but she did not mention that Peter had to buy a laptop. In the end, if price and power were more important than mobility, desktops would still be the most valuable alternatives.

We also saw a lot of great things in the other submissions like Good analytical skills shown in the PowerPoint presentations or Models with a larger amount of parent objectives.

In terms of descriptions, all our participants did a great job defining alternatives but very few participants seemed to have done the same with their objectives! Too bad!

Overall, the competition was a success and we came across some great things. Too bad there is only room for 3 winners which made our selection delicate. We hope you enjoyed the competition as others may come.

Happy Decision Making!

Al

Choose your classes

After deciding which school you are attending and what you want to study over there, choosing your classes is the next big decision on your student’s schedule. A big decision that occurs every single semester, unless you are too late!

For now, finals are over and vacation time is being enjoyed by most of us. You might want to kick back, relax and forget everything about school; or you might be one of those that can’t wait for classes to start again. Regardless of the group of people you belong to, you will have to choose your classes pretty soon if it’s not already done. You might know that if you want the “perfect schedule” and the definition varies from students to students, you might have to wake up early to register as soon as classes are open.

Choosing your classes can only take a few minutes or it can take days depending on your methodology. When I was listening to my friends’ methodologies, I realize that not everybody has the same goal in mind when selecting their classes. Here are some of the methodologies I came across:

• Scheduling hard to party harder
• First things first
• Try to make it easy
• Getting into a specific school or program
• A mix of everything

Let me explain each one of them with more details.

Scheduling hard to party harder:

Some of my friends were trying to maximize their week-ends so they would only register for classes held consecutively in the week. They will try to only have classes on Mondays and Tuesdays or Wednesdays and Thursdays. They would have two or nearly three full days of class and enjoy sometimes 4 days of week-end which could sound pretty awesome. It is a great way of choosing your classes, especially if you have a job on the side or of if you like to party a lot. The first obstacle I observed regarding this way of choosing was that after that long of a week-end, it might be hard for some people to start working intensively and efficiently for 3 full days right away. The second issue that comes to my mind would be the exams. In the schools I’ve attended, most exams had to be taken during class time. If you have 5 classes in 2 or 3 days, it might also mean that you will have 5 exams in 2 or 3 days. Do you think that you can handle that?

Other students reached the same objectives but in another way. In order to be able to party all week, some students would only register for lectures held in the afternoon during the whole week. It allowed them to party at night, sleep in the morning, and study the afternoon. They could reproduce this cycle all week long for a full semester.

First things first:

Other people start by the requirement classes first. Once they get all the requirements out of the way, they are free to take any elective classes later in their academic career. The issue with that system is that requirement classes or gateway classes are often hard classes too. If you focus on taking them during the first semesters, you might also commit to work harder the few first semesters to maintain  good grades. Gateway classes are essential because they allow students to take some higher level classes but since they are harder, focusing on taking only these sounds a bit overwhelming to me.

Try to make it easy:

I also heard of student regrouping classes by subject. They would take all their biology classes the same semester for example and all their English classes the next one. That system doesn’t seem bad as it allows you to mainly focus on one subject. It might also be easier that way because some Economic classes for example, have several parts of the course in common. If you learn it in one class, you actually did the work for two or more classes. The downside is boredom… Having a semester full of History classes might be fatal to some us!

Other students pay close attention to the lengths of  classes. In fact, some students would rather see their “favorite teacher” once a week for three hours than three times a week for an hour. The classes’ lengths never affected my choices but now that I think about it would have helped me get through my most boring courses. The three hours lecture of history held would almost feel like a decade to me; making it harder to stay focus the entire class. I wish I thought about that earlier!

Getting into a specific school or program:

Some of my friends applying to graduate school found themselves not able to get in the program they wanted because they did not choose the right classes as undergraduate students. Some schools or some programs require specific classes to be admitted. If you did not take these classes as an undergraduate student, your chances to get in are really slim. Some of us keep that in mind when selecting their classes. However, to apply this methodology, you would have to be sure of what you want to do in the next four of 5 years. Which is not a given to every students.

A mix of everything:

For some us, it might be a little bit more complicated. In fact, some students love to party a lot during the week-end but cannot afford to party as hard during the week. They might also have a part-time job which implies that they would have to synchronize both schedules. And they might also think that grouping subject would make life a lot easier for them. For these students, a mix of some of the previous methodologies might be the best fit. They can take classes from two different subjects and arrange their schedule to avoid classes on Mondays or Fridays for instance. Depending on their work schedule, they might want to make some more adjustments or even some compromises. How many students have you seen taking classes against their will on a Saturday mornings because it was the only available lecture time matching their schedule?

All of these were not the only ways of selecting classes that I’ve seen.  Some of my friends were only taking night classes because they would work from 9 to 5. Others, working in retails for example, selected only classes the days they would not work. Other students wanted to minimize their overall time spent in school so they would take the maximum amount of classes each and every semester to make sure to graduate early. . I even saw students selecting classes depending on the traffic on campus. The morning classes are often the most popular so that means that more students would be on campus before noon. They would choose their classes in the morning so they can socialize easily with other students.  With all that being said, how do you choose your classes?

Pairwise Comparison: A useful tool

Some time ago, my digital camera mysteriously disappeared on campus and I’ve been missing it.

As a student, you might know how crucial and important a camera might be in our lives: You might want to take pictures of the most memorable parties you have attended and you might also want to capture your favorite rock band coming to perform on campus. You might use your camera in a casual way, taking pictures of your friends on and off campus or you could also want to be the “official photographer” at every event organized at your school. For some of us studying film or photography, a camera is even more important as it might be a daily used professional tool tomorrow. In brief, because we, students, use our cameras a lot, I decided to re-invest in one (that I would not leave unattended this time).

I like photography a lot so I decided to invest a fair amount of money in order to get a decent picture quality. I would love my camera to be compact enough for me to carry it everywhere. Since I am planning to spend plenty of time taking pictures on campus, I would also like it to be somehow stylish. As I down selected three cameras, each one of them had its strengths and weaknesses.

My dilemma was the following: The smallest camera and also the most pocket able one, was the less versatile because you could not switch lenses and also had the simplest design. The best in terms of picture quality was the biggest, heaviest but had a cool professional look. The third one was somewhere in between the previous two in terms of picture quality and size and had an attractive retro design. Tough choice!

But picking the one I wanted was not my only issue. Christmas is approaching and at this time of the year, getting the exact item you want at your local shop starts being unsure. I needed a plan B maybe even a plan C, just in case my initial pick would be out of stock. This is was the perfect situation to use AHP and its Pairwise comparisons.

Dealing with too many variables could be confusing, but dealing with two at the time is a lot easier. This is the reason why it is simpler to use Pairwise comparison in those cases. Instead of comparing the cameras as a whole to one another, I will try to determine how important a feature is to me compared to another one. I will be asked how much more do I value design over picture quality, or how much more important the size is compared to the design. All this data are going to be analyzed, checked for inconsistency then summarized into a nice ranking of what would be the best fit for me.

We can look at it that way and focus on one particular aspect of the cameras: the design. If I am looking at 50 different cameras, and I have to determine which one is the most attractive to me; it would probably be a long and possibly hard task. In the other hand, if I was asked to perform the same task facing 2 different models, it will be a lot easier.

We can look at it yet in another way when comparing objectives. When choosing my camera, I had 3 main criteria (or objectives) in mind: the design, the picture quality and the size. If I was asked which one of this objective is the most important to me, I would have a hard time telling you right away (and there are only three objectives). The same problem facing 50 or 60 different objectives would be almost impossible for me to solve accurately. But if I was asked to choose between two of them (design and picture quality for example), the problem becomes easy; even when facing hundreds of objectives.

With the help of Pairwise Comparisons, we can simplify the issue so we only compare two things at the time whether they are alternatives or objectives. Simply because it is easier for the human mind to deal with two variables at the time; Pairwise Comparison will help us determine which camera is the smallest or which feature is the most important, always comparing only two items at the time. Even when facing thousands of variables.

When it comes to ranking, people usually assign it with ordinal number (1,2,3,..) or other verbal scales (high, medium, low) without using Pairwise Comparisons. By doing this, you don’t really know how much better one alternative was compared to another one. In a car race for instance, knowing who is first doesn’t tell us if he won by a millisecond or by an entire lap. With Pairwise Comparisons and the methodology behind it, you actually derive weights by telling how much more important one thing is compared to another, instead of just assigning weights. As a result you can determine how much better your first alternative is compared to your second.

Once again, AHP has been proven a helpful tool throughout my decision process. Because size and picture quality were the most important for me, I chose the second camera with the retro design. However, if it was not available at the store, I was prepared for my next pick.

 

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5 reasons to explain your bad decisions

Along the course of your life you probably made good decisions and bad decisions. Congratulation for the good ones; but you might not be so proud of the bad ones. Did you ever ask yourself how you came to make that bad of a decision? Did you guess? Were you conscious about the possible negative outcomes? Were your judgments obstructed or bias? Maybe were you convinced it was the right one? Many factors can lead a good willed individual to make a bad decision without even him noticing it. Some of these factors are the following:

• The endowment effect
• The sunk cost effect
• The attribution error
• Overconfidence
• Peer pressure

Let’s now take a look at these factors, and find out how they led you to firmly believe that the “not so good” decision that you just made was in fact awesome.

The endowment effect might be a reason why someone might make a bad decision, especially when in the selling or buying process. In fact the endowment effect is a theory stating that an “individual will value a lot more an item once he or she owns it than when the item is not owned (yet)”. To reach this conclusion, several experiments have been made but the most famous one is the coffee mug experiment. Researchers placed 100 students in the same room and gave to a random 50 of them a free coffee mug. They were then asked to proceed to a trade with the students that did not receive the coffee mug. Surprisingly the average selling price for the free coffee mug was $7 when the average price that buyers were willing to pay for it was only $3, closer to the real market value of the item.

This study did not only teach us that people value a lot more an owned item compared to one they do not possess; it also taught us that people are more motivated to avoid loss than they are driven to attain gain. It might cloud their judgments…

The sunk cost effect is also a known reason of why someone would make a bad decision.  In economics and business decision-making, the sunk costs are the time, money and other resources invested that are lost and cannot be recovered. When making decisions, a lot of people still account for the sunk costs. The past should remain the past but it’s irrationally common to believe that “because we started it, we must finish it”. Resources already lost should not be a bias in our present judgments as it often happens in decision such as “should I buy a new car knowing that I already spent  $2000 dollars on my current one?” or “ Should I really break-up with my girlfriend after two years with her?”. In those two cases, we account for resources already lost. Let it go!

Often we assume something for the wrong reasons, and that could also cloud our judgments when making decisions. In fact when something happens, people tend to find the most rational explanation for it; human nature. But this explanation is not always the correct one. We assume that all criminals are bad people but we hardly ask ourselves the reasons behind the crimes. James Surowiecki conducted an interesting experiment where the subjects were asked to observe two basketball players under different lighting conditions. Regardless of the lighting conditions, most of the participants assumed that the player who had great lighting missed fewer shots because he was more skilled than the one playing under poor lighting. If you challenged Kobe Bryant to blindfold himself and enter in a 3 point shooting contest, you might win; but at equal conditions, it will be another story.

Confidence is sure a good thing as long as you don’t have it in excess. Underestimating the difficulty of a task is a common mistake that everybody might have made one day. According to a study conducted by Ole Svenson in the 1980’s, 80% of the people interviewed ranked themselves in the top 30% of all drivers and yet, intoxication and other human factors contribute wholly or partly to about 93% of crashes. A good example of overconfidence that might lead to bad decision is the adoption of the seat belt in motorized vehicles. The seat-belt is supposed to protect the passengers from fatal injuries when a collision happens but it also gives the driver extra confidence. John Adams, professor at the University College London, suggested that the rate of car related death did not decrease as predicted since the appearance of the seat belt because of an important factor: “risk compensation”.  According to his theory, better drivers take less care (in other words, they take more risks) which resulted in only a slight decrease in fatal car crashes.

You might also think that people make decisions based on what they think but it’s not always the case. Solomon Asch conducted an experiment that led us to believe that a lot of people are highly influenced by their peers. In his experiment, Asch put one real participant in a class room filled with fake participants. The class room was asked simple questions about the lengths of several lines (as seen above). The fake participants were instructed to give false answers to these simple questions. The results were confusing! One or two fake participants had only a small influence on the candidate, three or more fake participants had a large influence leading to a THIRD of the real participants giving false answers. According to this experiment, if we gather enough people to testify that the sun is in fact green, a third of the audience might believe it!

Understanding AHP

Before interning at Expert Choice, the letters AHP were totally unfamiliar to me. During the past months, I have learned that AHP stands for Analytical Hierarchy Process which is, in simpler words, a decision methodology. This process was invented in the 1970’s but it has been refined since. Expert Choice uses this methodology to make decision support software.

Based on math and psychology, AHP is powerful, flexible and brings transparency, and accuracy to the decision making process. It helps its user throughout the whole process by structuring a decision into smaller parts, proceeding from the goal to objectives to sub-objectives down to the alternative courses of action. AHP could be seen as a reliable and logical advisor.

This is how it works:

The user will create a decision goal and associate alternatives in order to reach this goal. An alternative could be compared to one’s option and an example of a decision goal could be “choosing a car to buy”. The alternatives associated with this goal are in fact, a wide variety of cars. Let’s assume that we are choosing between: an SUV, a Sport Sedan and a Compact hybrid. The user will set objectives to evaluate his decision. The objectives of “choosing a car to buy” are in fact a list of all the criteria in a vehicle that are essential to the decision maker and will affect his or her final choice of vehicle. The gas mileage, the style, the size, the performances… are all potential objectives in the choice of your prospective car. The objectives are going to be compared to one another by “pair wise comparisons” throughout the hierarchy. The user will provide qualitative and quantitative data on “how does he or she value more an objective or an alternative compared to another”. All these judgments are going to be checked for inconsistency, then synthesized by AHP, and sorted into a list of alternatives in the following forms:

-          A choice (choosing one alternative from a given set with multiple criteria involved)

-          A ranking (Sorting alternatives from most desirable to least desirable)

-          A prioritization (sort alternatives in order of importance)

-          An allocation of resources ( share out resources between multiple alternatives)

Depending on the nature of the decision goal, AHP can also be used for bench marking and quality management.

AHP incorporates human judgment in its process which makes it applicable for a wide range decisions. From choosing a spring break destination to the success evaluation of a future merger, AHP is a good tool.

Having a methodology

Is there a best way to make a decision? It’s a tough question because everyone does not operate the same way. Some people tend to rely more on their instincts and feelings to make decisions (and it works) while others base them on purely hard logical skills. I would say that because each way has its strengths and its weaknesses, it would be hard to determine which one is the best.

A personal decision like “which movie am I going to see tonight?” can purely rely on instincts and feelings because a bad decision could not result in a dramatic loss. Worst case scenario: you wasted 2 hours and a half of your time for the price of $10.50. On the other hand, a professional decision about a potential investment would have trouble relying just on instincts and feelings. The consequences of a bad decision would affect a lot more people and possibly jeopardize the future of the entire company. When facing such a decision, the company will use methodologies such as calculating the Net Present Value of the business (or NPV). If the NPV is positive, the company can proceed with the investment because it would add value to the firm; if the NPV is negative, the investment will not occur.

When based on feelings and instincts, the decision is made faster which might help, but some important factors might be omitted too. This type of decision making methodology can be very helpful when time is a constraint. When based on a more scientific methodology, the decision outcome might be more reliable because of the hard reasoning behind it; but the whole process of collecting and analyzing data takes a lot more time. A big part of the decision process is to find the right way to make the decision. In other word: to find the right methodology.

For every type of decisions there will be a methodology. It can be instincts, calculating the Return on Investment of a company or it can even be a room filled with 20 people talking about the matter. Some methodologies like the Analytic Hierarchy Process (AHP) work for a wide range of decisions: From choosing to ranking, from allocating resources to prioritizing, AHP can be useful. Since it is applicable to so many different professional and personal situations, and combines intuition and data, AHP would be a perfect tool to have in your back pocket. You might even want to get rid of the old “coin tossing” methodology…

The good and the bad decision

We all make decisions every day. Whether it’s simple a decision like “What do I eat for lunch?” or a more complicated decisions like “How am I going to invest my savings?” decision making is part of our daily lives and it is important for us. Why is it so important?

What makes the difference between a good and a bad decision? I would say the outcome. If an outcome is satisfying enough, we could say that it’s probably the result of a good decision. On the other hand, if the outcome is unsatisfying, we could call it the consequence of a bad decision. Good and bad decisions affect our lives temporarily or permanently, personally or professionally every day. As rational beings we want to maximize our satisfaction.

A bad decision about the place to eat at lunch might ruin your day as a bad decision about the investment of your savings might ruin your entire life. How can we avoid making bad decision? How can we maximize good decisions?

In college, I learnt the importance of having a methodology. It helps you throughout any kind of process: to write an essay, execute mathematical operations, or even to play a sport. Why not using one to make better decisions?

Hello everyone!

Hello!

My name is Al and I am an intern at Expert Choice. I usually say that it is in Washington DC but this is technically incorrect. Even though we are located right across the Key Bridge, which leads directly into Georgetown, we are still in Arlington, Virginia.

Besides being an Intern, I also study finance. As a business student, I came to intern at Expert Choice because I wanted to learn more about a real business working environment and gain some work experience on top of it: I like it a lot!

Expert Choice is a prioritization and decision making software company based on the Analytic Hierarchy Process also known as AHP. Does that sound familiar? One of my assignments is to reach out to you, students and young professionals, and let you know we exist!

Here, I will share with you some of my experiences as an intern and what I’ve learned in the business world but I would also love to discuss with you the importance of understanding decision making methodologies. Being a student, feedback is always appreciated!

More to come!