P(S0) specifies initial conditions. CPSC 3Lecture 2 Slide 4. Models in decision theory and game theory assume that preferences are determinate: for any pair of possible outcomes, a and b, an agent either prefers a to b, prefers b to a, or is indifferent as between a and b. The focus of this entry is normative decision theory. That is, the main question of interest is .

Multiattribute utilities. Sequential decision problems. Department of Philosophy and the History of Technology. These three notions are usually considered to . This article is the first in a new HBR series on modern concepts of quantitative analysis of business problems and is designed to help the executive bring his attitude toward risk into the analysis of business problems involving uncertainty. Many economists and decision theorists insist on transitivity as the cornerstone of rational choice, and even in behavioral decision theory intransitivities are often attributed to faulty experiments, random or sloppy choices , poor . Preferences Aggregation : utility theory (Feb-15).

Intransitive preferences have been a topic of curiosity, study, and debate over the past years.

Review of Utility Theory. Many econo- mists and decision theorists insist on transitivity as the cornerstone of rational choice, and even in behavioral decision theory intransitivities are often attributed to faulty experiments, random or sloppy choices , poor. Without the independence axiom (or something else to replace it) there is not much you can infer about the preferences over lotteries if you only know the preferences over outcomes. Then preferences over lotteries ⪰ ∗ represented . Game theory is the study of conflict and cooperation among multiple decision makers, and is thus sometimes called interactive decision theory.

Social choice theory is the study of making a collective decision by combining the preferences of multiple decision makers in various ways. We consider the psychological effect of preference reversal and show that it finds a natural explanation in the frame of quantum decision theory. When people choose between lotteries with non-negative payoffs, they prefer a more certain lottery because of uncertainty aversion. However, the operational interpretation fails in one important dimension of the . But when people evaluate . Assume a complete preference order on acts.

If the preference order satisfies certain axioms,. V (a) ≡ Eµ(ua) ≥ V (b) ≡ Eµ( ub), where µ is a probability on S and ua(s) = u(a(s)). This paper investigates a purely qualitative approach to decision making under uncertainty.

Since the pioneering work of Savage, most models of decision under uncertainty rely on a numerical representation where utility and uncertainty are commensurate. Giving up this tradition, we relax this assumption and introduce an .

The theory offers a rich collection of techniques and . Orthodox decision theory gives no advice to agents who hold two goods to be incommensurate in value because such agents will have incomplete preferences. According to standard treatments, rationality requires complete preferences , so such agents are irrational. Experience shows, however, that . His research focuses on decision theory and foundations of game theory, but he has also worked on voting theory and other topics. A rational actor is an individual with consistent preferences (§). Indee if rationality implied selfishness, the only rational individuals would be sociopaths.

Beliefs, called subjective priors in decision theory , logically stand between choices and payoffs. Be- liefs are primitive data for the . One-Person Games with Moral Hazard. Retrospect: Applications and Moral Hazard.

Motivation and Organisation.