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Decisions, decisions: trees and analysis

A decision tree is a graphical representation of the sequence of decisions that must or might be made and each decision’s associated level of uncertainty. “We will decide to move for summary judgment: yes – 70%; no – 30%. We prevail completely on the motion: yes – 40%; no – 60%,” and so on. Each decision point shows as a node, each possible outcome shows as a branch with its uncertainty odds.

“Decision analysis is designed to help managers make rational, consistent decisions in an uncertain environment.” Economic Approaches to Intellectual Property: Policy, Litigation, and Management (NERA Econ. Consulting 2005, at 321). According to the summary of decision analysis, first you state clearly the problem to be addressed, the decisions that must be made, the objective of the decision-making process, the issues that influence the objective, and the sources of uncertainty. Law departments would benefit from the discipline of decision analysis.

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