Decision Theory: a Brief Introduction
Decision Theory
A Brief Introduction
1994-08-19 Minor revisions 2005-08-23 Sven Ove Hansson Department of Philosophy and the History of Technology Royal Institute of Technology (KTH) Stockholm
1
Contents
Preface ..........................................................................................................4 1. What is decision theory? ..........................................................................5 1.1 Theoretical questions about decisions .........................................5 1.2 A truly interdisciplinary subject...................................................6 1.3 Normative and descriptive theories..............................................6 1.4 Outline of the following chapters.................................................8 2. Decision processes....................................................................................9 2.1 Condorcet .....................................................................................9 2.2 Modern sequential models ...........................................................9 2.3 Non-sequential models.................................................................10 2.4 The phases of practical decisions – and of decision theory.........12 3. Deciding and valuing................................................................................13 3.1 Relations and numbers .................................................................13 3.2 The comparative value terms .......................................................14 3.3 Completeness ...............................................................................16 3.4 Transitivity ...................................................................................17 3.5 Using preferences in decision-making.........................................19 3.6 Numerical representation .............................................................20 3.7 Using utilities in decision-making
A Brief Introduction
1994-08-19 Minor revisions 2005-08-23 Sven Ove Hansson Department of Philosophy and the History of Technology Royal Institute of Technology (KTH) Stockholm
1
Contents
Preface ..........................................................................................................4 1. What is decision theory? ..........................................................................5 1.1 Theoretical questions about decisions .........................................5 1.2 A truly interdisciplinary subject...................................................6 1.3 Normative and descriptive theories..............................................6 1.4 Outline of the following chapters.................................................8 2. Decision processes....................................................................................9 2.1 Condorcet .....................................................................................9 2.2 Modern sequential models ...........................................................9 2.3 Non-sequential models.................................................................10 2.4 The phases of practical decisions – and of decision theory.........12 3. Deciding and valuing................................................................................13 3.1 Relations and numbers .................................................................13 3.2 The comparative value terms .......................................................14 3.3 Completeness ...............................................................................16 3.4 Transitivity ...................................................................................17 3.5 Using preferences in decision-making.........................................19 3.6 Numerical representation .............................................................20 3.7 Using utilities in decision-making
References: 82 Chisholm, Roderick M and Ernest Sosa (1966) "On the Logic of 'Intrinsically Better '", American Philosophical Quarterly 3:244-249 83 Fischhoff, Baruch and R Beyth (1975) "´I knew it would happen´ remembered probabilities of once-future things", Organizational Behavior and Human Performance 13:1-16 84 Hansson, Bengt (1975), "The appropriateness of the expected utility model", Erkenntnis 9:175-193 85 Hoerl, Arthur E and Herbert K Fallin (1974), "Reliability of Subjective Evaluations in a High Incentive Situation", Journal of the Royal Statistical Society 137, Part 2, 227-230 86 Levi, Isaac (1980), The enterprise of knowledge 87 Murphy, AH and RL Winkler (1984) "Probability forecasting in meteorology", Journal of the American Statistical Association 79:489-500 88 Ruthen, Russell (1993) "Strange Matter", Scientific American August 1993, p 89 Skyrms, Brian (1980), "Higher order degrees of belief", pp 90 Wald, A (1950), Statistical Decision Functions