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The Theory of Value and the Science of Decision a Summary

Author

Listed:
  • Nicholas M. Smith

    (Operations Research Office, Johns Hopkins University)

  • Stanley S. Walters

    (Operations Research Office, Johns Hopkins University)

  • Franklin C. Brooks

    (Operations Research Office, Johns Hopkins University)

  • David H. Blackwell

    (Operations Research Office, Johns Hopkins University)

Abstract

Operations research is defined as “the science of decision.” It is necessary, therefore, to understand the rationale and operation of the decision process. Decision is primarily based upon two quantities: (1) the probability with which certain immediate outcomes may result if a given course of action is taken; and (2) the value or worth of these outcomes. The product of probability times value summed over all the possible outcomes is the expected value, or simply the expectation . The course of action which leads to the highest expectation is the indicated choice of the decision. Decision means preference, and preference can be expressed only between like quantities. Thus, the problem in establishing a set of values is to establish a numerical function which will enable the ranking of preference of states or conditions. Operations Research , ISSN 0030-364X, was published as Journal of the Operations Research Society of America from 1952 to 1955 under ISSN 0096-3984.

Suggested Citation

  • Nicholas M. Smith & Stanley S. Walters & Franklin C. Brooks & David H. Blackwell, 1953. "The Theory of Value and the Science of Decision a Summary," Operations Research, INFORMS, vol. 1(3), pages 103-113, May.
    • Handle: RePEc:inm:oropre:v:1:y:1953:i:3:p:103-113
    DOI: 10.1287/opre.1.3.103
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