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Choices: An Introduction to Decision Theory

Michael D. Resnik
Copyright Date: 1987
Edition: NED - New edition
Pages: 240
  • Cite this Item
  • Book Info
    Book Description:

    Provides a broad yet rigorous introduction to the fundamentals of decision theory (the collection of mathematical, logical, and philosophical theories of decision making by rational individuals) that pays particular attention to matters of philosophical and logical interest.

    eISBN: 978-0-8166-8231-7
    Subjects: Philosophy

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
    (pp. xi-xii)
    M. D. R.
    (pp. xiii-2)
  5. Chapter 1 INTRODUCTION
    (pp. 3-20)

    Decision theory is the product of the joint efforts of economists, mathematicians, philosophers, social scientists, and statisticians toward making sense of how individuals and groups make or should make decisions. The applications of decision theory range from very abstract speculations by philosophers about ideally rational agents to practical advice from decision analysts trained in business schools. Research in decision theory is just as varied. Decision theorists with a strong mathematical bent prefer to investigate the logical consequences of different rules for decision making or to explore the mathematical features of different descriptions of rational behavior. On the other hand, social...

    (pp. 21-44)

    KATHRYN LAMBI is a brilliant graduate student in physics. She is also happily married to Paul Lambi and they want children. Kathryn has a difficult decision to make because her ideas about mothering are rather traditional; she believes that she ought to care for her children herself during their preschool years. But she cannot do that and perform long and delicate experiments. Each day resolving her dilemma becomes more urgent. Should she have her children now and postpone her career? Or should she capitalize now on her brilliant start in order to establish herself as a physicist and raise her...

    (pp. 45-80)

    When Michael Smith applied to Peoples Insurance Company for a life insurance policy in the amount of $25,000 at a premium of $100 for one year, he was required to fill out a lengthy health and occupation questionnaire and submit to an examination by a physician. According to the results, Smith fell into the category of persons with a 5% death rate for the coming year. This enabled Peoples to assign a probability of .05 to Smith’s dying within the year, and thus the decision whether or not to insure him became oneunder risk.

    I will represent this decision...

    (pp. 81-120)

    Utilities are just as critical to our account of decisions under risk as probabilities since the rule of maximizing expected utility operates on them. But what are utilities? And what do utility scales measure? In discussing decisions under ignorance I hinted at answers to these questions. But such allusions will not suffice for a full and proper understanding of decisions under risk. So let us begin with a more thorough and systematic examination of the concept of utility.

    The first point we should observe is that ordinal utility scales do not suffice for making decisions under risk. Tables 4-1 and...

  9. Chapter 5 GAME THEORY
    (pp. 121-176)

    Individual decision theory focuses on decisions involving the choices of one agent and outcomes determined by the agent’s choices and the background environment. Its paradigms are those of a single person deciding whether to wear a raincoat, place a bet, invest in a stock, or attend a law school. Some of its examples, such as the choice between taking a course under Professor Smith rather than under Professor Jones, involve other individuals, but in analyzing such examples it treats the additional individuals as part of the environment. Now we will expand our analytic framework to include cases in which the...

  10. Chapter 6 SOCIAL CHOICES
    (pp. 177-212)

    Groups of individuals — such as clubs, nations, or professional societies — that aim to function as cohesive units cannot depend on the choices made by their members on an individual basis to lead to a collective outcome that furthers the group’s interests. A university, for example, that did not fix a schedule of classes and vacation breaks could hardly promote an orderly learning process, because everyone — professors and students alike — has different ideas about the best way to schedule classes. But how should a class schedule be developed? What weight should be assigned to the opinions of...

    (pp. 215-216)
  12. INDEX
    (pp. 219-222)
  13. Back Matter
    (pp. 223-223)