Popular decision theory books goodreads share book. Having published extensively on decision theory and related topics, peterson is an ideal author for such a book. In the modern literature, the term is mostly used in an informal sense, describing principles for dynamic decision situations. The argument crucially requires that an action can provide. Decision theory without independence or without ordering. Lecture 8 the subjective theory of betting on theories. I took a course in decision theory they called it decision analysis at stanford years ago. Dutch books, additivity, and utility theory1 brad armendt arizona state university one guide to an arguments significance is the number and variety of refutations it attracts. Dutch book argument an overview sciencedirect topics. Translation for decision in the free englishdutch dictionary and many other dutch translations. We visit the birthplace of statistical decision theory, and discuss the rst chapter of the rst book on the subject. Theories of inference or decision based on subjective.
Ill use the term generalized dutchbook to refer to arguments with a family resemblance to dutchbook or moneypump. Jul 30, 2018 ive just signed a contract with cambridge university press to write a book on the dutch book argument for their elements in decision theory and philosophy series. Mcgee constructs another type of dutch book with implications for decision theory. Introduction the origin of the term dutch book is unknown to me, unfortunately. This post is more about articulating motivations than about presenting anything new, but i think readers may learn something about the foundations of classical evidential decision theory as they stand.
This has important implications for machine learning. An explication of the dutch book arguments for bayesian epistemology. A formal philosophical introduction richard bradley london school of economics and political science march 9, 2014 abstract decision theory. Particularly against this background, but also on its own merits, martin petersons an introduction to decision theory 2009 is a welcome addition to the field. Oct 01, 2015 in the context of the sleeping beauty problem, it has been argued that socalled halfers can avoid dutch book arguments by adopting evidential decision theory.
The main point of the dutch book argument is to show that rational people must have subjective probabilities for random events, and that these probabilities must satisfy the standard axioms of probability. Dutch written by kwame teague is raw, gritty and a definite page turner. Decision theory provides a formal framework for making logical choices in the face of uncertainty. Appears in 3 books from 19871999 page 5 individual decision theory recognizes no distinction either moral or rational between the goals of killing oneself, being a sadist, making a million dollars, or being a missionary. Dutch books arguments are questionable, as we will see, and the dutch book. One guide to an arguments significance is the number and variety of refutations it attracts. I introduce a dutch book for a variant of the sleeping beauty problem and argue that evidential decision theorists fall prey to it, whether they are halfers or thirders. Barrett, jeff and frank arntzenius, an infinite decision puzzle, theory and decision.
The assumed probabilities can be rooted in behavioral finance, and are a direct result. In gambling, a dutch book or lock is a set of odds and bets which guarantees a profit. It made a decision for 1996, that is exactly what it did in the judgement, which it suffices to read. Additionally, it should also be aware of that the expected utility theory is a theory of. The main character dutch is ruthless and a force to be reckoned with. Decision theory or the theory of choice not to be confused with choice theory is the study of an agents choices. The impact of the highly improbable by nassim nicholas tale. The only way to avoid being swindled by a dutch book is to be bayesian.
But mostly this post is to introduce people to the argument and to get people thinking about a solution. The objective and subjective variants of bayesian probability differ mainly in their interpretation and construction of the prior probability. As a theory of ideally rational beings, whether decision theory is affected by paradoxes involving what most people think is debatable. It is associated with probabilities implied by the odds not being coherent. The objective and subjective variants of bayesian probability differ mainly in. If our goal is to design an ideally rational agent, then this agent must represent and manipulate its beliefs using the rules of probability. Most of decision theory is normative or prescriptive, i. Decision theory without independence or without ordering volume 4 issue 2 teddy seidenfeld skip to main content accessibility help we use cookies to distinguish you from other users and to provide you with a better experience on our websites. I found this question from ian hackings book on induction and probability. Used it for a decision theory class and many lectures were spent fighting over the validity of the arguments in this book.
Draft of the book here is the current draft of the book pdf. Principles and approaches we decided to cover three areas. Decision theory is concerned with the reasoning underlying an agents choices, whether this is a mundane choice between taking the bus or getting a taxi, or a more farreaching choice about whether to pursue a demanding political career. Dutch book arguments stanford encyclopedia of philosophy. The fundamentals of decision analysis were developed in the late 1950s and the ideas first appeared in book form with schlaifers probability and statistics for business decisions 1959. We can distinguish three of them, two of which concern individual choice, while the third frames individual choices within the analysis of the social system. Jan 25, 2020 dutch book arguments do have their critics. The first approach can determine how a rational decision maker must choose. So over the next few months, im going to be posting some bits and pieces as i get properly immersed in the literature.
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalised after the fact with the benefit of hindsight. I prove a dutch book theorem and converse dutch book theorem for kolmogorov conditionalization. By this measure, the dutch book argument has considerable importance. The norm is based upon kolmogorovs theory of conditional probability. Many problems in decision theory intersect problems in action theory. But mostly this post is to introduce people to the argument and to. Theory and decision addresses the crossfertilization of the methods of these disciplines. I introduce a dutch book for a variant of the sleeping.
A type of probability theory that postulates that profit opportunities will arise when inconsistent probabilities are assumed in a given context and are in violation of the. Giovanni parmigiani is the author of decision theory. I cant remember the name of the book we used, but i did remember that mit opencourseware has a class called decisions, games and rational choice. Lecture 8 the subjective theory of betting on theories patrick maher philosophy 517 spring 2007. In gambling, a dutch book or lock is a set of odds and bets which guarantees a profit, regardless of the outcome of the gamble. I understand that a dutch book is a gambling term wherein everyone wins. By this measure, the dutch book argument has consider. The dutch book argument this is the most popular argument that rational degrees of belief.
Rational choice theory solutions to problems from resnik. Theory and decision rg journal impact rankings 2018 and 2019. In economics, the term usually refers to a sequence of trades that would leave one party strictly worse off. Dutch book theorem is a type of probability theory that postulates that profit opportunities will arise when inconsistent probabilities are assumed in a given context and violate the bayesian approximation. In the dutchbook approach the structure of probability theory follows solely from the requirement of consistent betting behavior. Cols cooperative decision problem decision table decision theory decisions under ignorance decisions under risk dominance dutch book equilibrium pair example expected utility game theory given hank harsanyis theorem indifferent interpersonal comparisons. It is shown as the additivity condition for these priceprobabilities is not required by the dutch book argument if preferences are represented by a continuous utility function that is not differentiable. What are the best beginners books about decision theory. Dutch book theorem is a type of probability theory that postulates that profit opportunities will arise when inconsistent probabilities are.
Jan 25, 2020 posts about decision theory written by word philosophy. Judgement and decision making study guide by haleybarragan includes 90 questions covering vocabulary, terms and more. Quizlet flashcards, activities and games help you improve your grades. Dutch books, additivity, and utility theory arizona state university. Here well see how dutch books generate important philosophical. Savage 1954 consolidated and enlarged the bridge by showing that to satisfy certain behavioral requirements in the style of, but more abstract and general than, the no dutch book assumption is equivalent to choosing among prospects according to the. Decision analysis came to early maturity in the 1960s when howard 1965, 1966 merged decision theory and systems modeling. At the end of the book they only thing i could say is damn.
There certainly are better rational books on decision theory. Savage 1954 consolidated and enlarged the bridge by showing that to satisfy certain behavioral requirements in the style of, but more abstract and general than, the nodutchbook assumption is equivalent to choosing among prospects according to the. This survey offers critical assessments of several kinds of dutch book arguments. How to make decisions gives readers an excellent harvard game theory course by a renowned nobel prize winner through the eyes of his boswell. This book is forthcoming with cambridge university press.
It will appear in their series cambridge elements in decision theory and philosophy, which is edited by martin peterson. Pdf dutch books, additivity, and utility theory brad. Draper and pust also argue that hitchcocks use of a dutch book argument is subject to an objection from evidential decision theory draper and pust 2008. Solutions to problems from resniks choices section 11. Dutch book arguments purport to show that rationality requires certain constraints on an agents subjective probabilities, on pain of the agent being susceptible to sure losses in corresponding bets. A dutch book theorem and converse dutch book theorem for. Of course this measure alone is not a sure guide to locating arguments deserving. Yet, assumptions of the dutch book arguments need also be aware of. I advance a diachronic norm, kolmogorov conditionalization, that governs credal reallocation in many such learning scenarios. Lurdes yoshiko tani inoue is a brazilianborn statistician of japanese descent, who specializes in bayesian inference.
Decision theory stanford encyclopedia of philosophy. Ive just signed a contract with cambridge university press to write a book on the dutch book argument for their elements in decision theory and philosophy series. Thinking, fast and slow by daniel kahneman, the black swan. A dutch book against sleeping beauties who are evidential. It remains defensible that the dutch book argument shows that the probability axioms are something like consistency constraints on partial belief, at least given some substantial decisiontheoretic assumptions, unlike the idea that their violation is a pragmatic liability.
Although, the last part of the question describe a dutch book for dave is confusing. A dutch book against sleeping beauties who are evidential decision theorists vincent conitzer the date of receipt and acceptance should be inserted later abstract in the context of the sleeping beauty problem, it has been argued that socalled \halfers can avoid dutch book arguments by adopting evidential decision theory. Particularly the dutch book arguments have been used as the philosophical base of rationality. The dutch book arguments attempt to justify the bayesian approach to science and belief. Most people interested in decision theory know about the vnm theorem and the dutch book argument, and not much more. I will also suggest that any successful dutch book defense of bayesianism cannot be disentangled from decision theory. The origin of the term dutch book is unknown to me, unfortunately. But if we use decision theory to make those choices, we must make yet another set of choices. Book description decision theory provides a formal framework for making logical choices in the face of uncertainty.
Dutch book arguments assume that your credences match your betting. Given a set of alternatives, a set of consequences, and a correspondence between those sets, decision theory offers conceptually simple procedures for choice. After all, for all the dutch book or converse dutch book theorem tell you, it might be that your nonprobabilistic credences lead you to choose badly when faced with the very particular dutch book decision problem, but lead you to choose extremely profitably when faced with many other decision problems. The rationality basis in the arguments is questionable. It is a familiar argument that advocates accommodating the socalled paradoxes of decision theory by abandoning the independence postulate. Including the difference between synchronic and diachronic dutch books, and an. Objectivists believe in frequency theory definitions of probability, which refer to objective outcomes of events like coin flips. On rational decision with subjective probability in design. Dutch book arguments bayesian epistemology youtube. On some aspects of decision theory under uncertainty.
For example, greaves and wallace 2006 offer a cognitive decision theory. Given that actual human preferences are so complicated, im not sure that it even truly makes sense to say that people should or shouldnt have preferences with particular structures. On the one hand, since most people are not ideally rational, the. The eventual goal is to relax these assumptions in a way which addresses bounded processing power, but for now the goal is to get as much of classical decision theory as possible justified by a generalized dutchbook. This book is a must read for political scientists, economists, and anyone who has to make decisions of import. Rationality and coherence allow for substantial variation within the constraints they pose. This book presents an overview of the fundamental concepts and outcomes of rational decision making under uncertainty, highlighting the. Beauty problem and argue that evidential decision theorists fall prey to it, whether they. She works as a professor of biostatistics in the university of washington school of public health. Mar 19, 2019 choice under uncertainty is treated in economics by different approaches.