Related papers: Non-Classical Expected Utility Theory
The 'expected utility hypothesis' is one of the foundations of classical approaches to economics and decision theory and Savage's 'Sure-Thing Principle' is a fundamental element of it. It has been put forward that real-life situations…
Decision-makers abhor uncertainty, and it is certainly true that the less there is of it the better. However, recognizing that uncertainty is part of the equation, particularly for deciding on environmental policy, is a prerequisite for…
Utility functions or their equivalents (value functions, objective functions, loss functions, reward functions, preference orderings) are a central tool in most current machine learning systems. These mechanisms for defining goals and…
We consider a decision maker who is unaware of objects to be sampled and thus cannot form beliefs about the occurrence of particular objects. Ex ante she can form beliefs about the occurrence of novelty and the frequencies of yet to be…
The 'expected utility hypothesis' and 'Savage's Sure-Thing Principle' are violated in real life decisions, as shown by the 'Allais' and 'Ellsberg paradoxes'. The popular explanation in terms of 'ambiguity aversion' is not completely…
Decision theory does not traditionally include uncertainty over utility functions. We argue that the a person's utility value for a given outcome can be treated as we treat other domain attributes: as a random variable with a density…
We propose a generalization of expected utility that we call generalized EU (GEU), where a decision maker's beliefs are represented by plausibility measures, and the decision maker's tastes are represented by general (i.e.,not necessarily…
Various ways for decision making with imprecise probabilities (admissibility, maximal expected utility, maximality, E-admissibility, $\Gamma$-maximax, $\Gamma$-maximin, all of which are well-known from the literature) are discussed and…
In statistical physics, the conservation of particle number results in the equalization of the chemical potential throughout a system at equilibrium. In contrast, the homogeneity of utility in socio-economic models is usually thought to…
I present a novel mathematical technique for dealing with the infinities arising from divergent sums and integrals. It assigns them fine-grained infinite values from the set of hyperreal numbers in a manner that refines the standard…
Approaches to decision-making under uncertainty in the belief function framework are reviewed. Most methods are shown to blend criteria for decision under ignorance with the maximum expected utility principle of Bayesian decision theory. A…
In this paper, we first consider a Bayesian framework and model the "utility function" in terms of fuzzy random variables. On the basis of this model, we define the "prior (fuzzy) expected utility" associated with each action, and the…
We axiomatize the Choquet rank-dependent utility model within a Savage framework with an exogenous source of pure risk. This model is a decision model under ambiguity, serving as a conceptual generalization of the Choquet expected utility…
Preferences among acts are analyzed in the style of L. Savage, but as partially ordered. The rationality postulates considered are weaker than Savage's on three counts. The Sure Thing Principle is derived in this setting. The postulates are…
The paper studies the notion of supposition encoded in non-Archimedean conditional probability (and revealed in the acceptance of the so-called indicative conditionals). The notion of qualitative change of view that thus arises is…
Bayesian probability theory is used to analyze the oft-made assumption that humans are typical observers in the universe. Some theoretical calculations make the {\it selection fallacy} that we are randomly chosen from a class of objects by…
In recent years, the non-relativistic quantum dynamics derived from three assumptions; i) probability current conservation, ii) average energy conservation, and iii) an epistemic momentum uncertainty [A. Budiyono and D. Rohrlich,…
By embedding uncertainty into time, we obtain a conjoint axiomatic characterization of both Exponential Discounting and Subjective Expected Utility that accommodates arbitrary state and outcome spaces. In doing so, we provide a novel and…
In earlier work, we introduced the framework of language-based decisions, the core idea of which was to modify Savage's classical decision-theoretic framework by taking actions to be descriptions in some language, rather than functions from…
How can we extract theoretical insights from machine learning algorithms? We take a familiar lesson: researchers often turn their intuitions into theoretical insights by constructing "anomalies" -- specific examples highlighting…