Decision theory, the Glossary

Table of Contents

1. 100 relations: Abraham Wald, Admissible decision rule, Adrian Smith (statistician), Allais paradox, Amos Tversky, Analytic philosophy, Anchoring effect, Annals of Mathematical Statistics, Axiom, Bayesian epistemology, Bayesian probability, Bayesian statistics, Behavioral economics, Blaise Pascal, Bounded rationality, Bruno de Finetti, Causal decision theory, Charles Sanders Peirce, Choice modelling, Conceptual model, Constraint satisfaction, Daniel Bernoulli, Daniel Ellsberg, Daniel Kahneman, Decision analysis, Decision quality, Decision support system, Decision-making, Dempster–Shafer theory, Detection theory, Distinction bias, Donald Davidson (philosopher), Dutch book theorems, Dynamic inconsistency, Ellsberg paradox, Emotional choice theory, Erich Leo Lehmann, Estimation theory, Evidential decision theory, Expected utility hypothesis, Expected value, Frank Ramsey (mathematician), Frequentist inference, Functional Decision Theory, Fuzzy logic, Gambler's fallacy, Game theory, Heuristic, Hyperbolic discounting, Inflation, ... Expand index (50 more) »

2. Formal sciences
3. Statistical inference

Abraham Wald

Abraham Wald (Wald Ábrahám, אברהם וואַלד; –) was a Jewish Hungarian mathematician who contributed to decision theory, geometry and econometrics, and founded the field of sequential analysis.

See Decision theory and Abraham Wald

Admissible decision rule

In statistical decision theory, an admissible decision rule is a rule for making a decision such that there is no other rule that is always "better" than it (or at least sometimes better and never worse), in the precise sense of "better" defined below.

See Decision theory and Admissible decision rule

Adrian Smith (statistician)

Sir Adrian Frederick Melhuish Smith, PRS (born 9 September 1946) is a British statistician who is chief executive of the Alan Turing Institute and president of the Royal Society.

See Decision theory and Adrian Smith (statistician)

Allais paradox

The Allais paradox is a choice problem designed by to show an inconsistency of actual observed choices with the predictions of expected utility theory.

See Decision theory and Allais paradox

Amos Tversky

Amos Nathan Tversky (עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk.

See Decision theory and Amos Tversky

Analytic philosophy

Analytic philosophy is a broad, contemporary movement or tradition within Western philosophy and especially anglophone philosophy, focused on analysis.

See Decision theory and Analytic philosophy

Anchoring effect

The anchoring effect is a psychological phenomenon in which an individual's judgements or decisions are influenced by a reference point or "anchor" which can be completely irrelevant.

See Decision theory and Anchoring effect

Annals of Mathematical Statistics

The Annals of Mathematical Statistics was a peer-reviewed statistics journal published by the Institute of Mathematical Statistics from 1930 to 1972.

See Decision theory and Annals of Mathematical Statistics

Axiom

An axiom, postulate, or assumption is a statement that is taken to be true, to serve as a premise or starting point for further reasoning and arguments.

See Decision theory and Axiom

Bayesian epistemology

Bayesian epistemology is a formal approach to various topics in epistemology that has its roots in Thomas Bayes' work in the field of probability theory.

See Decision theory and Bayesian epistemology

Bayesian probability

Bayesian probability is an interpretation of the concept of probability, in which, instead of frequency or propensity of some phenomenon, probability is interpreted as reasonable expectation representing a state of knowledge or as quantification of a personal belief.

See Decision theory and Bayesian probability

Bayesian statistics

Bayesian statistics is a theory in the field of statistics based on the Bayesian interpretation of probability, where probability expresses a degree of belief in an event. Decision theory and Bayesian statistics are mathematical and quantitative methods (economics).

See Decision theory and Bayesian statistics

Behavioral economics

Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory.

See Decision theory and Behavioral economics

Blaise Pascal

Blaise Pascal (19 June 1623 – 19 August 1662) was a French mathematician, physicist, inventor, philosopher, and Catholic writer.

See Decision theory and Blaise Pascal

Bounded rationality

Bounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal.

See Decision theory and Bounded rationality

Bruno de Finetti

Bruno de Finetti (13 June 1906 – 20 July 1985) was an Italian probabilist statistician and actuary, noted for the "operational subjective" conception of probability.

See Decision theory and Bruno de Finetti

Causal decision theory

Causal decision theory (CDT) is a school of thought within decision theory which states that, when a rational agent is confronted with a set of possible actions, one should select the action which causes the best outcome in expectation.

See Decision theory and Causal decision theory

Charles Sanders Peirce

Charles Sanders Peirce (September 10, 1839 – April 19, 1914) was an American scientist, mathematician, logician, and philosopher who is sometimes known as "the father of pragmatism".

See Decision theory and Charles Sanders Peirce

Choice modelling

Choice modelling attempts to model the decision process of an individual or segment via revealed preferences or stated preferences made in a particular context or contexts.

See Decision theory and Choice modelling

Conceptual model

The term conceptual model refers to any model that is formed after a conceptualization or generalization process.

See Decision theory and Conceptual model

Constraint satisfaction

In artificial intelligence and operations research, constraint satisfaction is the process of finding a solution through a set of constraints that impose conditions that the variables must satisfy.

See Decision theory and Constraint satisfaction

Daniel Bernoulli

Daniel Bernoulli (– 27 March 1782) was a Swiss mathematician and physicist and was one of the many prominent mathematicians in the Bernoulli family from Basel.

See Decision theory and Daniel Bernoulli

Daniel Ellsberg

Daniel Ellsberg (April 7, 1931 – June 16, 2023) was an American political activist, economist, and United States military analyst.

See Decision theory and Daniel Ellsberg

Daniel Kahneman

Daniel Kahneman (דניאל כהנמן; March 5, 1934 – March 27, 2024) was an Israeli-American psychologist best-known for his work on the psychology of judgment and decision-making as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences together with Vernon L.

See Decision theory and Daniel Kahneman

Decision analysis

Decision analysis (DA) is the discipline comprising the philosophy, methodology, and professional practice necessary to address important decisions in a formal manner.

See Decision theory and Decision analysis

Decision quality

Decision quality (DQ) is the quality of a decision at the moment the decision is made, regardless of its outcome.

See Decision theory and Decision quality

Decision support system

A decision support system (DSS) is an information system that supports business or organizational decision-making activities.

See Decision theory and Decision support system

Decision-making

In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options.

See Decision theory and Decision-making

Dempster–Shafer theory

The theory of belief functions, also referred to as evidence theory or Dempster–Shafer theory (DST), is a general framework for reasoning with uncertainty, with understood connections to other frameworks such as probability, possibility and imprecise probability theories.

See Decision theory and Dempster–Shafer theory

Detection theory

Detection theory or signal detection theory is a means to measure the ability to differentiate between information-bearing patterns (called stimulus in living organisms, signal in machines) and random patterns that distract from the information (called noise, consisting of background stimuli and random activity of the detection machine and of the nervous system of the operator).

See Decision theory and Detection theory

Distinction bias

Distinction bias, a concept of decision theory, is the tendency to view two options as more distinctive when evaluating them simultaneously than when evaluating them separately.

See Decision theory and Distinction bias

Donald Davidson (philosopher)

Donald Herbert Davidson (March 6, 1917 – August 30, 2003) was an American philosopher.

See Decision theory and Donald Davidson (philosopher)

Dutch book theorems

In decision theory, economics, and probability theory, the Dutch book arguments are a set of results showing that agents must satisfy the axioms of rational choice to avoid a kind of self-contradiction called a Dutch book.

See Decision theory and Dutch book theorems

Dynamic inconsistency

In economics, dynamic inconsistency or time inconsistency is a situation in which a decision-maker's preferences change over time in such a way that a preference can become inconsistent at another point in time.

See Decision theory and Dynamic inconsistency

Ellsberg paradox

In decision theory, the Ellsberg paradox (or Ellsberg's paradox) is a paradox in which people's decisions are inconsistent with subjective expected utility theory.

See Decision theory and Ellsberg paradox

Emotional choice theory

Emotional choice theory (also referred to as the "logic of affect") is a social scientific action model to explain human decision-making.

See Decision theory and Emotional choice theory

Erich Leo Lehmann

Erich Leo Lehmann (20 November 1917 – 12 September 2009) was a German-born American statistician, who made a major contribution to nonparametric hypothesis testing.

See Decision theory and Erich Leo Lehmann

Estimation theory

Estimation theory is a branch of statistics that deals with estimating the values of parameters based on measured empirical data that has a random component. Decision theory and Estimation theory are mathematical and quantitative methods (economics).

See Decision theory and Estimation theory

Evidential decision theory

Evidential decision theory (EDT) is a school of thought within decision theory which states that, when a rational agent is confronted with a set of possible actions, one should select the action with the highest news value, that is, the action which would be indicative of the best outcome in expectation if one received the "news" that it had been taken.

See Decision theory and Evidential decision theory

Expected utility hypothesis

The expected utility hypothesis is a foundational assumption in mathematical economics concerning decision making under uncertainty.

See Decision theory and Expected utility hypothesis

Expected value

In probability theory, the expected value (also called expectation, expectancy, expectation operator, mathematical expectation, mean, expectation value, or first moment) is a generalization of the weighted average.

See Decision theory and Expected value

Frank Ramsey (mathematician)

Frank Plumpton Ramsey (22 February 1903 – 19 January 1930) was a British philosopher, mathematician, and economist who made major contributions to all three fields before his death at the age of 26.

See Decision theory and Frank Ramsey (mathematician)

Frequentist inference

Frequentist inference is a type of statistical inference based in frequentist probability, which treats “probability” in equivalent terms to “frequency” and draws conclusions from sample-data by means of emphasizing the frequency or proportion of findings in the data. Decision theory and frequentist inference are statistical inference.

See Decision theory and Frequentist inference

Functional Decision Theory

Functional Decision Theory (FDT) is a school of thought within decision theory which states that, when a rational agent is confronted with a set of possible actions, one should select the decision procedure (a fixed mathematical decision function, as opposed to a singular act) that leads to the best output.

See Decision theory and Functional Decision Theory

Fuzzy logic

Fuzzy logic is a form of many-valued logic in which the truth value of variables may be any real number between 0 and 1.

See Decision theory and Fuzzy logic

Gambler's fallacy

The gambler's fallacy, also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the belief that, if an event (whose occurrences are independent and identically distributed) has occurred less frequently than expected, it is more likely to happen again in the future (or vice versa).

See Decision theory and Gambler's fallacy

Game theory

Game theory is the study of mathematical models of strategic interactions. Decision theory and Game theory are formal sciences and mathematical and quantitative methods (economics).

See Decision theory and Game theory

Heuristic

A heuristic or heuristic technique (problem solving, mental shortcut, rule of thumb) is any approach to problem solving that employs a pragmatic method that is not fully optimized, perfected, or rationalized, but is nevertheless "good enough" as an approximation or attribute substitution.

See Decision theory and Heuristic

Hyperbolic discounting

In economics, hyperbolic discounting is a time-''inconsistent'' model of delay discounting.

See Decision theory and Hyperbolic discounting

Inflation

In economics, inflation is a general increase in the prices of goods and services in an economy.

See Decision theory and Inflation

Info-gap decision theory

Info-gap decision theory seeks to optimize robustness to failure under severe uncertainty,Yakov Ben-Haim, Information-Gap Theory: Decisions Under Severe Uncertainty, Academic Press, London, 2001.

See Decision theory and Info-gap decision theory

Interest rate

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum).

See Decision theory and Interest rate

John von Neumann

John von Neumann (Neumann János Lajos; December 28, 1903 – February 8, 1957) was a Hungarian and American mathematician, physicist, computer scientist, engineer and polymath.

See Decision theory and John von Neumann

Joseph Jastrow

Joseph Jastrow (January 30, 1863 – January 8, 1944) was a Polish-born American psychologist notorious for inventions in experimental psychology, design of experiments, and psychophysics.

See Decision theory and Joseph Jastrow

Leonard Jimmie Savage

Leonard Jimmie Savage (born Leonard Ogashevitz; 20 November 1917 – 1 November 1971) was an American mathematician and statistician.

See Decision theory and Leonard Jimmie Savage

Life expectancy

Human life expectancy is a statistical measure of the estimate of the average remaining years of life at a given age.

See Decision theory and Life expectancy

Loss function

In mathematical optimization and decision theory, a loss function or cost function (sometimes also called an error function) is a function that maps an event or values of one or more variables onto a real number intuitively representing some "cost" associated with the event.

See Decision theory and Loss function

Ludic fallacy

The ludic fallacy, proposed by Nassim Nicholas Taleb in his book The Black Swan (2007), is "the misuse of games to model real-life situations".

See Decision theory and Ludic fallacy

Management science

Management science (or managerial science) is a wide and interdisciplinary study of solving complex problems and making strategic decisions as it pertains to institutions, corporations, governments and other types of organizational entities.

See Decision theory and Management science

Martin Shubik

Martin Shubik (1926-2018) was an American mathematical economist who specialized in game theory, defense analysis, and the theory of money.

See Decision theory and Martin Shubik

Maurice Allais

Maurice Félix Charles Allais (31 May 19119 October 2010) was a French physicist and economist, the 1988 winner of the Nobel Memorial Prize in Economic Sciences "for his pioneering contributions to the theory of markets and efficient utilization of resources", along with John Hicks (Value and Capital, 1939) and Paul Samuelson (The Foundations of Economic Analysis, 1947), to neoclassical synthesis.

See Decision theory and Maurice Allais

Minimax

Minimax (sometimes Minmax, MM or saddle point) is a decision rule used in artificial intelligence, decision theory, game theory, statistics, and philosophy for minimizing the possible loss for a worst case (''max''imum loss) scenario.

See Decision theory and Minimax

Multiple-criteria decision analysis

Multiple-criteria decision-making (MCDM) or multiple-criteria decision analysis (MCDA) is a sub-discipline of operations research that explicitly evaluates multiple conflicting criteria in decision making (both in daily life and in settings such as business, government and medicine).

See Decision theory and Multiple-criteria decision analysis

Newcomb's paradox

In philosophy and mathematics, Newcomb's paradox, also known as Newcomb's problem, is a thought experiment involving a game between two players, one of whom is able to predict the future.

See Decision theory and Newcomb's paradox

Norm (philosophy)

Norms are concepts (sentences) of practical import, oriented to affecting an action, rather than conceptual abstractions that describe, explain, and express.

See Decision theory and Norm (philosophy)

Operations research

Operations research (operational research) (U.S. Air Force Specialty Code: Operations Analysis), often shortened to the initialism OR, is a discipline that deals with the development and application of analytical methods to improve decision-making. Decision theory and Operations research are mathematical and quantitative methods (economics).

See Decision theory and Operations research

Optimal decision

An optimal decision is a decision that leads to at least as good a known or expected outcome as all other available decision options.

See Decision theory and Optimal decision

Oskar Morgenstern

Oskar Morgenstern (January 24, 1902 – July 26, 1977) was a German-born economist.

See Decision theory and Oskar Morgenstern

Pascal's wager

Pascal's wager is a philosophical argument advanced by Blaise Pascal (1623–1662), seventeenth-century French mathematician, philosopher, physicist, and theologian.

See Decision theory and Pascal's wager

Patrick Suppes

Patrick Colonel Suppes (March 17, 1922 – November 17, 2014) was an American philosopher who made significant contributions to philosophy of science, the theory of measurement, the foundations of quantum mechanics, decision theory, psychology and educational technology.

See Decision theory and Patrick Suppes

Pensées

The Pensées (Thoughts) is a collection of fragments written by the French 17th-century philosopher and mathematician Blaise Pascal.

See Decision theory and Pensées

Positive and normative statements

In economics and philosophy, a positive statement (or descriptive statement) concerns what "is"; this is contrasted with normative statements (or prescriptive statements), which express a normative judgment about a proposition.

See Decision theory and Positive and normative statements

Possibility theory

Possibility theory is a mathematical theory for dealing with certain types of uncertainty and is an alternative to probability theory.

See Decision theory and Possibility theory

Preference (economics)

In economics, and in other social sciences, preference refers to an order by which an agent, while in search of an "optimal choice", ranks alternatives based on their respective utility.

See Decision theory and Preference (economics)

Prior probability

A prior probability distribution of an uncertain quantity, often simply called the prior, is its assumed probability distribution before some evidence is taken into account.

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Probability

Probability is the branch of mathematics concerning events and numerical descriptions of how likely they are to occur.

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Probability theory

Probability theory or probability calculus is the branch of mathematics concerned with probability.

See Decision theory and Probability theory

Prospect theory

Prospect theory is a theory of behavioral economics, judgment and decision making that was developed by Daniel Kahneman and Amos Tversky in 1979.

See Decision theory and Prospect theory

Quantum cognition

Quantum cognition uses the mathematical formalism of quantum probability theory to model psychology phenomena when classical probability theory fails.

See Decision theory and Quantum cognition

Rational choice theory

Rational choice theory refers to a set of guidelines that help understand economic and social behaviour.

See Decision theory and Rational choice theory

Rationality

Rationality is the quality of being guided by or based on reason.

See Decision theory and Rationality

Richard Threlkeld Cox

Richard Threlkeld Cox (August 5, 1898 – May 2, 1991) was a professor of physics at Johns Hopkins University, known for Cox's theorem relating to the foundations of probability.

See Decision theory and Richard Threlkeld Cox

Risk

In simple terms, risk is the possibility of something bad happening.

See Decision theory and Risk

Robust statistics

Robust statistics are statistics that maintain their properties even if the underlying distributional assumptions are incorrect.

See Decision theory and Robust statistics

Secretary problem

The secretary problem demonstrates a scenario involving optimal stopping theory For French translation, see in the July issue of Pour la Science (2009).

See Decision theory and Secretary problem

Sensitivity analysis

Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system (numerical or otherwise) can be divided and allocated to different sources of uncertainty in its inputs. Decision theory and Sensitivity analysis are mathematical and quantitative methods (economics).

See Decision theory and Sensitivity analysis

Sidney Siegel

Sidney Siegel (4 January 1916 in New York City – 29 November 1961) was an American psychologist who became especially well known for his work in popularizing non-parametric statistics for use in the behavioral sciences.

See Decision theory and Sidney Siegel

Small-numbers game

In economics and decision theory, a small-numbers game is a situation in an oligopolistic market in which the actions of one player have direct unforeseeable consequences for other players.

See Decision theory and Small-numbers game

Sociocognitive

Sociocognitive or socio-cognitive is a term especially used when complex cognitive and social properties are reciprocally connected and essential for a given problem.

See Decision theory and Sociocognitive

St. Petersburg paradox

The St.

See Decision theory and St. Petersburg paradox

Stanford University Press

Stanford University Press (SUP) is the publishing house of Stanford University.

See Decision theory and Stanford University Press

Statistical hypothesis test

A statistical hypothesis test is a method of statistical inference used to decide whether the data sufficiently support a particular hypothesis. Decision theory and statistical hypothesis test are mathematical and quantitative methods (economics).

See Decision theory and Statistical hypothesis test

Statistical significance

In statistical hypothesis testing, a result has statistical significance when a result at least as "extreme" would be very infrequent if the null hypothesis were true.

See Decision theory and Statistical significance

Statistics

Statistics (from German: Statistik, "description of a state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. Decision theory and Statistics are formal sciences and mathematical and quantitative methods (economics).

See Decision theory and Statistics

Stochastic dominance

Stochastic dominance is a partial order between random variables.

See Decision theory and Stochastic dominance

Stochastic transitivity

Stochastic transitivity models are stochastic versions of the transitivity property of binary relations studied in mathematics.

See Decision theory and Stochastic transitivity

There are unknown unknowns

"There are unknown unknowns" is a phrase from a response United States Secretary of Defense Donald Rumsfeld gave to a question at a U.S. Department of Defense (DoD) news briefing on February 12, 2002, about the lack of evidence linking the government of Iraq with the supply of weapons of mass destruction to terrorist groups.

See Decision theory and There are unknown unknowns

Trade-off talking rational economic person

Trade-off talking rational economic person (TOTREP) is one term, among others, used to denote, in the field of choice analysis, the rational, human agent of economic decisions.

See Decision theory and Trade-off talking rational economic person

Two envelopes problem

The two envelopes problem, also known as the exchange paradox, is a paradox in probability theory.

See Decision theory and Two envelopes problem

Utility

In economics, utility is a measure of the satisfaction that a certain person has from a certain state of the world.

See Decision theory and Utility

See also

Formal sciences

• Actuarial science
• Analytics
• Artificial intelligence
• Artificial intelligence content detection
• Artificial wisdom
• Birkhoff's theorem (equational logic)
• Computational linguistics
• Computer science
• Confrontation analysis
• Cryptography
• Data mining
• Decision theory
• Exact sciences
• Formal linguistics
• Formal ontology
• Formal science
• Game theory
• Grammar systems theory
• Homeokinetics
• Image analysis
• Information theory
• Logic
• Mathematics
• Organoid intelligence
• Oxford model
• Pattern recognition
• Perceptual control theory
• Prescriptive analytics
• Queueing theory
• Risk analysis (business)
• Statistics
• Systems ecology
• Systems science
• Theoretical computer science
• Theoretical linguistics

Statistical inference

• Additive disequilibrium and z statistic
• Algorithmic inference
• Bayesian inference
• Data transformation (statistics)
• Decision theory
• Empirical characteristic function
• Exact statistics
• Fiducial inference
• Frequentist inference
• Gambling and information theory
• Group size measures
• Informal inferential reasoning
• Inverse probability
• Model selection
• Multispecies coalescent process
• Nonparametric statistics
• Overfitting
• Parametric statistics
• Polykay
• Pseudolikelihood
• Randomised decision rule
• Resampling (statistics)
• Rodger's method
• Sampling distribution
• Solomonoff's theory of inductive inference
• Spillover (experiment)
• Statistical forecasting
• Statistical hypothesis testing
• Statistical inference
• Sunrise problem
• Transferable belief model
• Weighted product model
• Weighted sum model
• Well-behaved statistic
• Whittle likelihood

References

[1] https://en.wikipedia.org/wiki/Decision_theory

Also known as Agency dilema, Choice under uncertainty, Decision making under risk, Decision making under uncertainty, Decision science, Decision sciences, Decision strategy, Descriptive decision theory, Empirical decision theory, Formal decision methods, Heuristics in decision making, Normative decision theory, Prescriptive decision theory, Statistical decision theory, Theory of choice, Uncertainty Modeling.

, Info-gap decision theory, Interest rate, John von Neumann, Joseph Jastrow, Leonard Jimmie Savage, Life expectancy, Loss function, Ludic fallacy, Management science, Martin Shubik, Maurice Allais, Minimax, Multiple-criteria decision analysis, Newcomb's paradox, Norm (philosophy), Operations research, Optimal decision, Oskar Morgenstern, Pascal's wager, Patrick Suppes, Pensées, Positive and normative statements, Possibility theory, Preference (economics), Prior probability, Probability, Probability theory, Prospect theory, Quantum cognition, Rational choice theory, Rationality, Richard Threlkeld Cox, Risk, Robust statistics, Secretary problem, Sensitivity analysis, Sidney Siegel, Small-numbers game, Sociocognitive, St. Petersburg paradox, Stanford University Press, Statistical hypothesis test, Statistical significance, Statistics, Stochastic dominance, Stochastic transitivity, There are unknown unknowns, Trade-off talking rational economic person, Two envelopes problem, Utility.