ABSTRACT
This chapter presents approaches and methods that can be used to integrate various concerns and compare decision options where risk is an issue. There are different decision analysis methods. The chapter looks into multi-attribute analysis, cost-effectiveness analysis, cost-benefit analysis and expected utility theory. The expected utility approach to decision-making is based on computing the expected utility of the consequences’ for different decision alternatives and choosing the alternative with the highest expected utility. The cost-effectiveness and cost-benefit analyses take a portfolio perspective by focusing on expected values. Cost-effectiveness analysis evaluates the effectiveness of a measure by computing the expected cost of the measure divided by the expected gain obtained by this measure, for example, measured by the expected number of saved lives or expected increase in profit. A multi-attribute analysis presents the consequences of the various decision alternatives separately for the various attributes of interest.
