Decision Theory

Front 1

Individual Decision:

Back 1

Need not be one human being. Can be a nation, club etc. An attempt to realize some organizational goal would be an individual decision.

Front 2

Group Decision:

Back 2

When several individuals belonging to some club (etc) adjudicate differences about a group's goals or priorities.

e.g. voters.

Front 3

Game Theory:

Back 3

Individual decisions that look like group decisions. They always involve more than one person, but each side is trying to further his own goal.

Front 4

Decisions Involve 3 Things:

Back 4

Acts, States, and Outcomes.

Front 5

Decision Tables involve the following three:

Back 5

Acts, States, Outcomes

Front 6

Problem Specification:

Back 6

Several specifications may pertain to one decision. For specification to be definite and complete, its states must be exhaustive and mutually exclusive.

Front 7

Problems with Problem Specification:

Back 7

Proper description of states.

Front 8

Dominance Principle:

Back 8

If act A dominates B, then you choose A. This applies only when the acts do not affect the probability of the state.

Front 9

Second Order Decision:

Back 9

A decision about the decision problem specification.

Front 10

Decisions Under Risk:

Back 10

Possible to assign probabilities to all outcomes arising from each act.

Front 11

Decisions Under Ignorance:

Back 11

Makes no sense to assign probabilities to outcomes arising from acts.

Front 12

If xPy and yPz:

Back 12

xPz

Front 13

If xPy and xIz:

Back 13

zPy

Front 14

If xPy and yIz:

Back 14

xPz

Front 15

If xIy and yIz:

Back 15

xIz

Front 16

aIb, aPc, cPd, aIe, eIf, fIg, dPh, hIi, iPj
yields what indifference classes and utility scales?

Back 16

5. a,b [5]
4. c [4]
3. d,e,f,g [3]
2. h,i [2]
1. j [1]

Front 17

Ordinal Utility Functions:

Back 17

Represent only the ordering of an agent's preferences. Any transformation of an ordinal scale which preserves this representation is acceptable.