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Decision Theory FAQ — LessWrong

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Co-authored with crazy88. Please let us know when you find mistakes, and we'll fix them. Last updated 03-27-2013. Contents: Decision theory, also known as rational choice theory, concerns the study of preferences, uncertainties, and other issues related to making "optimal" or "rational" choices. It has been discussed by economists, psychologists, philosophers, mathematicians, statisticians, and computer scientists. We can divide decision theory into three parts (Grant & Zandt 2009; Baron 2008). Normative decision theory studies what an ideal agent (a perfectly rational agent, with infinite computing power, etc.) would choose. Descriptive decision theory studies how non-ideal agents (e.g. humans) actually choose. Prescriptive decision theory studies how non-ideal agents can improve their decision-making (relative to the normative model) despite their imperfections. For example, one's normative model might be expected utility theory, which says that a rational agent chooses the action wi

x Decision Theory FAQ — LessWrong Decision theory Q&A (format) Bayesian Decision Theory Timeless Decision Theory Frontpage 121 Decision Theory FAQ by lukeprog 28th Feb 2013 69 min read 487 121 Co-authored with crazy88 . Please let us know when you find mistakes, and we'll fix them. Last updated 03-27-2013. Contents : 1. What is decision theory? 2. Is the rational decision always the right decision? 3. How can I better understand a decision problem? 4. How can I measure an agent's preferences? 4.1. The concept of utility 4.2. Types of utility 5. What do decision theorists mean by "risk," "ignor

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