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© 2008

Nonbayesian Decision Theory

Beliefs and Desires as Reasons for Action

Benefits

  • First non-Bayesian account of normative decision theory

  • Axiomatisation of expected utility principle does not rely on independence axiom

  • Includes a formal account of the framing of decision problems

Book

Part of the Theory and Decision Library book series (TDLA, volume 44)

Table of contents

  1. Front Matter
    Pages i-viii
  2. Pages 1-12
  3. Pages 81-94
  4. Pages 95-108
  5. Pages 109-125
  6. Pages 127-142
  7. Back Matter
    Pages 143-170

About this book

Introduction

This book aims to present an account of rational choice from a non-Bayesian point of view. Rational agents maximize subjective expected utility, but contrary to what is claimed by Bayesians, the author argues that utility and subjective probability should not be defined in terms of preferences over uncertain prospects. To some extent, the author’s non-Bayesian view gives a modern account of what decision theory could have been like, had decision theorists not entered the Bayesian path discovered by Ramsey, Savage, and Jeffrey. The author argues that traditional Bayesian decision theory is unavailing from an action-guiding perspective. For the deliberating Bayesian agent, the output of decision theory is not a set of preferences over alternative acts - these preferences are on the contrary used as input to the theory. Instead, the output is a (set of) utility function(s) that can be used for describing the agent as an expected utility maximizer, which are of limited normative relevance.On the non-Bayesian view articulated by the author, utility and probability are defined in terms of preferences over certain outcomes. These utility and probability functions are then used for generating preferences over uncertain prospects, which conform to the principle of maximizing expected utility. It is argued that this approach offers more action guidance.

Keywords

Bayesian Independence axiom Non-Bayesian Decision Theory Utility Theory decision theory probability

Authors and affiliations

  1. 1.Department of History and Philosophy of ScienceUniversity of CambridgeCB2 3RHUK

Bibliographic information

Reviews

From the reviews:

"This book presents an account of rational choice from a non-Bayesian point of view. … this book argues that the non-Bayesian approach offers more action guidance to the decision maker. … the book is well addressed to all researchers in the field of decision theory, and especially those with philosophical concerns." (Vangelis Grigoroudis, Zentralblatt MATH, Vol. 1151, 2009)

“Anyone concerned in the foundations of normative decision theory and who feels puzzled by the way this theory typically proceeds will doubtless welcome Martin Peterson’s Non-Bayesian Decision Theory. … Perterson’s book is written in a clear and pleasant style, is well organized and shows an impressive mastery of both formal models and conceptual issues pertaining to contemporary decision theory. … Its reading will be valuable to every scholar – philosopher or economist – interested by decision theory.” (Mikaël Cozic, Economics and Philosophy, Vol. 27, 2011)