MgS 8160, Risk Benefit Analysis
Very Preliminary Schedule
Fall 2008, 314 ALC, Monday 4:30-7:00

Part 2: Benefit
Part 2: Benefit

Oct 20
Class Exercise on Risk Attitude Click here for spreadsheet
Introduction to Utility Theory
Interval Utility Scales 
Soft Decision Analysis p5-6
Case: "Better Decisions with Preference Theory" p.129-137
Guido's EZ Loan                      
Oct 27
Estimating Utility Curves for Money
Buying  and Selling Price & the Wealth Effect
Utility for Nonmonetary Outcomes
Lala Lovely's utility 
Tenfour Goodbuddy
Nov 3`
Big insurance, mutual insurance, and cartels 
 More on Prospect Theory
Roger Bucks
Case: "Better Decisions with Preference Theory" p.137-140
Nov 10
"Time and chance happen to them all" --
Risk-Adjusted Discount rates as an alternative to utility theory
Motel, Music and Gold examples with discounting; risk adjusted vs. utility
"Real Options: Valuing Managerial Flexibility"

Part 3: Real Options
Nov 17
Oil Example 
Motel, music & Gold Examples with mean & standard deviation
The Tomato Garden
"Real Options: Valuing Managerial Flexibility"
"Capital Projects as Real Options: An Introduction"
Nov 24
Comparison of Risk AdjustedNPV versus Utility Theory
Bayesian information as a Call Option
Insurance as a Put Option
Roger Bucks
Case: "Arundel partners:ct" pages 1-5, Exhibits 102
Dec 1
Comparison of NPV, Desision Analysis, and Real Option Theory
 Summary of the course     Another Summary
Case: "Arundel partners: The Sequal Project"

Dec 8
Take-home Final Exam  and Projects Due
Under door of 840 RCB or in tenth floor departmental office
or fax 626 605 2586