Decision Theory
2015
This chapter on normative decision theory is from the Stanford Encyclopedia of Philosophy, a dynamic reference work available online. Decision theory is concerned with the reasoning underlying an person's choices, whether a mundane choice between taking the bus or getting a taxi, or a more far-reaching choice about whether to pursue a demanding political career. The orthodox normative decision theory, expected utility (EU) theory, essentially says that, in situations of uncertainty, one should prefer the option with greatest expected desirability or value.
Section 1 discusses the basic notion of “preferences". Section 2 describes the development of normative decision theory. Section 3 discusses expected utility theory. Section 4 considers the broader significance of expected utility theory for practical action, inference, and valuing. Section 5 addresses challenges and Section 6 addresses sequential decisions.
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Source:
Steele K, Stefánsson HO. Decision Theory. Stanford Encyclopedia of Philosophy 2015. https://plato.stanford.edu/archives/win2016/entries/decision-theory