An economics perspective on the usefulness of decision support systems

Decision making in a decision support system is modeled as a sequential information acquisition process with noisy information sources and costly information assimilation. The net benefit from using a Decision Support Systems approach is compared to that from a Programs approach. DSS provides greater benefits for ad hoc decisions and this advantage increases as the information sources become noisier. Programs are preferred for recurrent decisions. Increased assimilation costs decrease the number of alternatives examined.