Skip to main content

IE3xx : Risk & Uncertainty

Prerequisites topics


Decision theory provides a rational framework for choosing between alternative courses of action when the consequences resulting from this choice are imperfectly known. This course introduces the idea of decision making in business settings (industrial and service systems) and other settings when the outcomes of these actions are known as well as unknown.  

  • Decision making under certainty
  • Decision making under uncertainty including decision trees, min-max criteria
  • Expected utility
  • Risk and risk aversion
  • Subjective Probability
  • Group decision like AHP, ANP etc and social choice


  • Simon French, Decision Theory: An Introduction to Mathematics of Rationality, John Wiley & Sons, 1988.
  • Howard Raiffa, Decision Analysis: Introductory Lectures on Choices under Uncertainty, Addison Wesley, 1970.
  • Itzhak Gilboa, Making Better Decisions: Decision Theory in Practice, Wiley-Blackwell, 2011.
  • D. V. Lindley, Making Decisions, John Wiley & Sons, 1985.
  • Martin Peterson, An Introduction to Decision Theory, Cambridge University Press, 2017.
  • Michael D Resnik, Choices: An Introduction to Decision Theory, University of Minnesota Press, 2000.
  • Peter C Fishburn, Foundations of Expected Utility Theory, Springer, 1982.