12 Decision Making Under Uncertainty

78 Pages Posted: 14 Feb 2006

See all articles by Ignacio Velez-Pareja

Ignacio Velez-Pareja

Grupo Consultor CAV Capital Advisory & Valuation

Date Written: February 10, 2006

Abstract

This is a course material from the book Investment Decision Making. For Firm and Project Valuation. The book is originally in Spanish and is untitled as Decisiones de inversión. Para la valoración financiera de proyectos y empresas.

Chapter 12 studies the problem of making decisions under risk and uncertainty. We present basic ideas on sensitivity analysis for one and several variables, game theory, decision trees, cardinal utility theory and Montecarlo simulation. We include some new subjects such as the Analytical Hierarchical Process, AHP and the Analytic Network Process, ANP, methods Developer by professor Thomas L. Saaty and a very short introduction to financial and real options.

Note: Downloadable document is in Spanish.

Keywords: Uncertainty, risk analysis, Montecarlo simulation, Analytical Hierarchy Process, sensitivity analysis, real options

JEL Classification: G31

Suggested Citation

Velez-Pareja, Ignacio, 12 Decision Making Under Uncertainty (February 10, 2006). Available at SSRN: https://ssrn.com/abstract=882886 or http://dx.doi.org/10.2139/ssrn.882886

Ignacio Velez-Pareja (Contact Author)

Grupo Consultor CAV Capital Advisory & Valuation ( email )

Ave Miramar # 18-93 Apt 6A
Cartagena
Colombia
+573112333074 (Phone)

HOME PAGE: http://cashflow88.com/decisiones/decisiones.html

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